Do not write out, please type up

Requirements:

Tony and Suzie graduate from college in May 2018 and begin developing their new business. They begin by offering clinics for basic outdoor activities such as mountain biking or kayaking. Upon developing a customer base, they’ll hold their first adventure races. These races will involve four-person teams that race from one checkpoint to the next using a combination of kayaking, mountain biking, orienteering, and trail running. In the long run, they plan to sell outdoor gear and develop a ropes course for outdoor enthusiasts.

On July 1, 2018, Tony and Suzie organize their new company as a corporation, Great Adventures Inc. The articles of incorporation state that the corporation will sell 37,000 shares of common stock for $1 each. Each share of stock represents a unit of ownership. Tony and Suzie will act as co-presidents of the company. The following transactions occur from July 1 through December 31.

The following information relates to year-end adjusting entries as of December 31, 2018.

1. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $7,320.
2. Six months’ worth of insurance has expired.
3. Four months’ worth of rent has expired.
4. Of the $1,800 of office supplies purchased on July 4, $330 remains.
5. Interest expense on the $43,000 loan obtained from the city council on August 1 should be recorded.
6. Of the $2,300 of racing supplies purchased on December 12, $170 remains.
7. Suzie calculates that the company owes $13,600 in income taxes.

Under current U.S. GAAP, goodwill is recorded when purchased. Referencing the theory of capital maintenance, and/or the conceptual framework, should purchased goodwill be capitalized?

Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis

Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 5,600 units of product were as follows:

Each unit requires 0.25 hour of direct labor.

Required:

a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

b. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

c. Determine variable factory overhead controllable variance, the fixed factory overhead volume variance, and total factory overhead cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Presented here are statement of income and retained earnings and Comparative Balance Sheets for Madison Garden PTY LTD, which operates a National chain of sporting goods.

Statement of income and Retained Earnings for the year ended 31 December 2016

Kristopher Company has budgeted sales of $300,000 with the following budgeted costs:

      Direct materials                                       $60,000

      Direct manufacturing labor                       40,000

      Factory overhead

            Variable                                               30,000

            Fixed                                                    50,000

      Selling and administrative expenses

            Variable                                               20,000

            Fixed                                                    30,000

      Required (10 points):

Compute the average markup percentage for setting prices as a percentage of:

1. The full cost of the product
2. The variable cost of the product
3. Variable manufacturing costs
4. Total manufacturing costs

1. Computers R US took out a 9 month, 4.25, $17,000 note on August 1, 2019 with interest and principal to be paid on maturity.

2. On October 1, 2019, Computers R US rented some storage space at a rate of $450 per month. On that date, Computers R US recorded Rent Expense for six months rent paid in advance.

3. Computers R US purchased $4,780 of office supplies during the year and the asset office supplies account was increased A count of the supplies on hand Dec 31, 2019, indicates a balance of $485.

4. $16,500 of store supplies were purchased during the year and were immediately expensed. A count of the store supplies on hand December 31, 2019, indicates a balance of $1.275.

5. On June 1, 2019 an 18-month insurance policy was purchased for $9,000.

6. On Dec 1, 2019, Computers R US collected $32,000 for consulting services to be performed from Dec. 1, 2019 to Feb. 28, 2020. The company credited the revenue account when paid.

7. On October 1, 2019, Computers R Us issued a 5-month note receivable to Morerams Inc. at an annual interest rate of 5%. Principle and interest will be paid at the end of the 5-months. The note was recorded in Notes Receivable and is the only note outstanding.

8. The company rented idle office space to Bytes and Bits on June 1, 2019, at a rate of $1500 per month. On this date Computers R Us credited Unearned Rent Revenue for one year of rent received in advance.

9. Computers R Us is open seven days a week and has a daily payroll of $5,430. Employees are paid every Friday, December 31 is a Monday. 40% of the payroll is for office employees, 60% of payroll is for sales employees.

10.  Depreciation for store equipment is based on the following: • Straight Line Depreciation • Store equipment – Assets were held for the entire year; Residual Value = $8,200; Service life is estimated to be 6 years.

11. Depreciation for office equipment is based on the following: • Double-Declining Method • Office equipment – Assets were purchased July 1; Residual Value = $4,000; Service life is estimated to be 4 years.

12. At 12/31/2019, based on the aging method, Computers R US determines that uncollectible accounts are $13,850.

13. Utilities expense of $3,700 remained unpaid. 40% of the utilities expense is for office and 60% of utilities expense is for the store.

Based on the following information,

a. Prepare a worksheet (Show formulas and use an "IF" statement)

b. Prepare the adjusting journal entries

c. Prepare a multiple step income statement

d. Prepare a statement of retained earnings

e. Prepare a balance sheet

f. Prepare the closing entries

Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement, which follows: Sales $ 1,645,000 Variable expenses 549,100 Contribution margin 1,095,900 Fixed expenses 1,205,000 Net operating income (loss) $ (109,100) In an effort to isolate the problem, the president has asked for an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East Central West Sales $ 395,000 $ 670,000 $ 580,000 Variable expenses as a percentage of sales 52 % 21 % 35 % Traceable fixed expenses $ 255,000 $ 336,000 $ 191,000 Required: 1. Prepare a contribution format income statement segmented by divisions, as desired by the president. 2-a. As a result of a marketing study, the president believes that sales in the West Division could be increased by 15% if monthly advertising in that division were increased by $25,000. Calculate the incremental net operating income. 2-b. Would you recommend the increased advertising? Yes No rev: 07_08_2014_QC_50927

TRUE OR FALSE?

** IF YOU CAN'T ANSWER THEM ALL, PLEASE DON'T ANSWER ANY**

1. When a company declares of cash dividends retained earnings is reduced.
2. Authorized stock is the total number of shares outstanding.
3. The asset turnover ratio measures how efficiently a company uses its assets to generate sales.
4. Pro forma income usually excludes items that the company thinks are unusual or nonrecurring.
5. Sales minus operating expenses equals gross profit.
6. Freight terms of FOB Destination means that the seller pays the freight costs.
7. Sales revenues are recognized during the period cash is collected from the buyer.
8. Under the lower-of-cost-or-market basis, market is defined as current replacement cost.
9. The safeguarding of assets is an objective of a company's system of internal control.
10. The custodian of the petty cash fund has the responsibility of recording a journal entry every time cash is used from the fund.
11. Both accounts receivable and notes receivable represent claims that expected to be paid in cash.

Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions

Compute the cost assigned to ending inventory using weighted average. (Round your average cost per unit to 2 decimal places.)

Compute the cost assigned to ending inventory using weighted average. (Round your average cost per unit to 2 decimal places.)

Compute the cost assigned to ending inventory using specific identification. For specific identification, units sold consist of 600 units from beginning inventory, 260 from the February 10 purchase, 150 from the March 13 purchase, 150 from the August 21 purchase, and 385 from the September 5 purchase. (Round your average cost per unit to 2 decimal places.)

10. The Nolan Corporation finds it is necessary to determine its marginal cost of capital. Nolan’s current capital structure calls for 30 percent debt, 30 percent preferred stock, and 40 percent common equity. Initially, common equity will be in the form of retained earnings (Ke) and then new common stock (Kn). The costs of the various sources of financing are as follows: debt, 8.5 percent; preferred stock, 6 percent; retained earnings, 12 percent; and new common stock, 13.2 percent.

a. What is the initial weighted average cost of capital? (Include debt, preferred stock, and common equity in the form of retained earnings, K_e.) (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.)

b. If the firm has $18 million in retained earnings, at what size capital structure will the firm run out of retained earnings? (Enter your answer in millions of dollars (e.g., $10 million should be entered as "10").)

c. What will the marginal cost of capital be immediately after that point? (Equity will remain at 40 percent of the capital structure, but will all be in the form of new common stock, K_n.) (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

d. The 8.5 percent cost of debt referred to earlier applies only to the first $24 million of debt. After that, the cost of debt will be 10.5 percent. At what size capital structure will there be a change in the cost of debt? (Enter your answer in millions of dollars (e.g., $10 million should be entered as "10").)

e. What will the marginal cost of capital be immediately after that point? (Consider the facts in both parts c and d.) (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

Problem 16-3A Weighted Average: Process cost summary; equivalent units LO C2, C3, P4

Fast Co. produces its product through a single processing department. Direct materials are added at the start of production, and conversion costs are added evenly throughout the process. The company uses monthly reporting periods for its weighted-average process costing system. The Work in Process Inventory account has a balance of $104,300 as of October 1, which consists of $23,100 of direct materials and $81,200 of conversion costs.

During the month the company incurred the following costs:

During October, the company started 160,000 units and transferred 170,000 units to finished goods. At the end of the month, the work in process inventory consisted of 30,000 units that were 80% complete with respect to conversion costs.

Required:
1. Prepare the company’s process cost summary for October using the weighted-average method.
2. Prepare the journal entry dated October 31 to transfer the cost of the completed units to finished goods inventory.

Prepare the company’s process cost summary for October using the weighted-average method. (Round "Cost per EUP" to 2 decimal places.)

• Record the transfer of goods to finished goods inventory.

Minden Company is a wholesale distributor of premium European chocolates. The company’s balance sheet as of April 30 is given below: Minden Company Balance Sheet April 30 Assets Cash $ 10,500 Accounts receivable 57,000 Inventory 42,500 Buildings and equipment, net of depreciation 236,000 Total assets $ 346,000 Liabilities and Stockholders’ Equity Accounts payable $ 72,750 Note payable 21,200 Common stock 180,000 Retained earnings 72,050 Total liabilities and stockholders’ equity $ 346,000 The company is in the process of preparing a budget for May and has assembled the following data: Sales are budgeted at $296,000 for May. Of these sales, $88,800 will be for cash; the remainder will be credit sales. One-half of a month’s credit sales are collected in the month the sales are made, and the remainder is collected in the following month. All of the April 30 accounts receivable will be collected in May. Purchases of inventory are expected to total $192,000 during May. These purchases will all be on account. Forty percent of all purchases are paid for in the month of purchase; the remainder are paid in the following month. All of the April 30 accounts payable to suppliers will be paid during May. The May 31 inventory balance is budgeted at $51,500. Selling and administrative expenses for May are budgeted at $98,700, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $2,150 for the month. The note payable on the April 30 balance sheet will be paid during May, with $220 in interest. (All of the interest relates to May.) New refrigerating equipment costing $6,800 will be purchased for cash during May. During May, the company will borrow $23,200 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year. Required: 1. Calculate the expected cash collections for May. 2. Calculate the expected cash disbursements for merchandise purchases for May. 3. Prepare a cash budget for May. 4. Prepare a budgeted income statement for May. 5. Prepare a budgeted balance sheet as of May 31.

XY Pte Ltd is finalising its financial statements for the year ended 31 December 20X1. The date of authorisation of financial statements for issue was 14 March 20X2 and the annual general meeting is scheduled on 23 April 20X2. The following events occurred as follows: (a) Inventory held by XY Pte Ltd was recorded at its cost of $1,104,000 at 31 December 20X1 in the statement of financial position. The whole inventory was damaged by flood water in December 20X1. The entity sold 80% of the inventory for $616,000 on 7 February 20X2. (b) On 9 August 20X1, the company invested $3 million in a promising high technology company ABX Ltd. The value of the investment rose to $3.5 million as at 31 December 20X1. However, on 14 January 20X2, a major earthquake struck the region where the factory of ABX was located, causing its share price to plummet. The value of the investment dropped to $1.5 million the next day

Illustrate the appropriate accounting treatment of the events in the financial statements of XY Pte Ltd for the year ended 31 December 20X1. Prepare the necessary journal entries, if necessary.