Balloons By Sunset (BBS) is considering the purchase of two new hot air balloons so that it can expand its desert sunset tours. Various information about the proposed investment follows:  

Assume straight line depreciation method is used.
  

Required:
Help BBS evaluate this project by calculating each of the following:  

1. Accounting rate of return. (Round your answer to 1 decimal place.)

        

2. Payback period. (Round your answer to 2 decimal places.)

         

3. Net present value (NPV). (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round the final answer to nearest whole dollar.)

         

4. Recalculate the NPV assuming BBS's cost of capital is 14 percent. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round the final answer to nearest whole dollar.)

    

G Force Manufacturing Company had net income of $300,000 in 2017 when the number of units produced and sold was 6000 and data for variable and fixed costs were as follows:

Cost Schedule

Variable Costs:          Direct Material                                           $35

                                    Direct Labour                                           $30

                                Variable Manufacturing Overhead                   $15

Fixed Costs:             Manufacturing Overhead                                  $232,000

                                    Advertising                                                      33,000

                                    Administrative                                                  155,000

Required:

1. Compute the selling price per unit in 2017, using the equation method.

2. Using the sales price per unit calculated in (i), prepare a contribution margin income statement for the year ended December 31, 2017, detailing the components of total fixed costs and clearly showing contribution and net income.

3. Calculate G-Force’s break-even point in units and in dollars.

4. Calculate the margin of safety in number of units and sales dollars.

5. Using the production/sales of 6,000 units, conduct a breakdown chart for G-Force Manufacturing Company, clearly showing the break-even point and the margin of safety in units and dollars and the region representing profits and losses. (Use a scale of 2 cm to represent 1,000 units on the x-axis and 2 cm to represent $200,000 on the y-axis).

6. The president of G-Force Manufacturing is under pressure from stockholders to increase operating income by 10% in 2018. Management expects per unit data and total fixed costs to remain the same in 2018. Compute the number of units that must be sold in 2018 to reach the shareholders’ desired profit level. Is this a realistic goal?

7. Assume that G-Force Manufacturing sells the same number of units in 2018 as it did in 2017. Assuming unit variable costs and total fixed costs remain unchanged, what would the new selling price have to be in order to reach the stockholders desired profit level?

Kara Ries, Tammy Bax, and Joe Thomas invested $34,000, $50,000, and $58,000, respectively, in a partnership. During its first calendar year, the firm earned $366,300. Prepare the entry to close the firm’s Income Summary account as of its December 31 year-end and to allocate the $366,300 net income to the partners under each of the following separate assumptions:

1) The partners have no agreement on the method of sharing income and loss.

2) The partners agreed to share income and loss in the ratio of their beginning capital investments. (Do not round intermediate calculations. Round final answers to the nearest whole dollar.)

3) The partners agreed to share income and loss by providing annual salary allowances of $35,000 to Ries, $30,000 to Bax, and $42,000 to Thomas; granting 10% interest on the partners’ beginning capital investments; and sharing the remainder equally.

Lipto Biomedic has credit sales of $740,000 yearly with credit terms of net 60 days, with an average collection period of 75 days. Lipto is considering offering a 3 percent discount for payment in 10 days. They would use the cash generated from the reduced receivables to reduce their bank loans which cost 8%. Assume ALL of the customers take advantage of the 3/10 terms. Use the following table to calculate the costs and benefits for Lipto and make decision at the bottom.

B) As mentioned above, Ipto Biomedic can borrow from its bank at 8% to take a cash discount offered by one of its suppliers. The terms of cash discount are 2/155 net 90. Should the Lipto borrow the funds? Why? Why not? Show all your work...

C) Lipto Biomedic sells its product for $32 each. The carrying costs of the inventory are $1.50 per unit and its costs Lipto $30 per order in purchasing agent time. If the raw materials can only be ordered by the "gross" (1 gross = 12 dozen = 144 items) What is the economic order quantity?

On 1 September 2019, Mike Co. signed a 12% six-month note receivable in settlement of accounts receivable of €320,000. The note and interest are all due at maturity.

1. Prepare the entry on 1 September 2019 made by Mike Co. to record the receipt of this note receivable. (5 points)
2. Prepare the 31 December 2018 (fiscal year-end), adjusting entry made by Mike Co. with regard to this note receivable. (5 points)
3. Prepare the entry made by Mike Co. on 1 March 2020 (maturity date of note), to record collection of note and interest. (5 points)
4. Assume that on 1 March 2020, the maker of the note defaults and Mike Co. does not collect the note and interest. Explain what Mike Co. would do in accounting records in this situation. (5 points)

Jacksonville Financial Service Co. which specializes in appliance repair service, is owned and operated by Cindy Latty.

Unadjusted Trial Balance December 31,2010

The data related to year ended adjustments are as follows:

Required:

Prepare Balance Sheet and Income and Expenditure Statement as at 31, 2010.

Cash Receipts
The sales budget for Perrier Inc. is forecasted as follows:

To prepare a cash budget, the company must determine the budgeted cash collections from sales. Historically, the following trend has been established regarding cash collection of sales:

• 60 percent in the month of sale.
• 20 percent in the month following sale.
• 15 percent in the second month following sale.
• 5 percent uncollectible.

The company gives a 2 percent cash discount for payments made by customers during the month of sale. The accounts receivable balance on April 30 is $22,000, of which $7,000 represents uncollected March sales and $15,000 represents uncollected April sales. Prepare a schedule of budgeted cash collections from sales for May, June, and July. Include a three-month summary of estimated cash collections.

Sitwell Corporation manufactures titanium and aluminum tennis racquets. Sitwell's total overhead costs consist of assembly costs and inspection costs. The following information is available:

Sitwell is considering switching from one overhead rate based on labor hours to activity-based costing.
Using activity-based costing, how much assembly cost is assigned to titanium racquets?

Cash Budget
Wilson's Retail Company is planning a cash budget for the next three months. Estimated sales revenue is as follows:

All sales are on credit; 60 percent is collected during the month of sale, and 40 percent is collected during the next month. Cost of goods sold is 70 percent of sales. Payments for merchandise sold are made in the month following the month of sale. Operating expenses total $41,000 per month and are paid during the month incurred. The cash balance on February 1 is estimated to be $20,000.

Prepare monthly cash budgets for February, March, and April.

Use negative signs only with beginning and ending cash balances, when appropriate. Do not use negative signs with disbursement answers.

On January 2, 2011, Jansing Corporation acquired a new machine with an estimated useful life of five years. The cost of the equipment was $40,000 with a residual value of $5,000.

a. Prepare a complete depreciation table under the two depreciation methods listed below.

1. Straight-line.

2. 200 percent declining-balance.

3. 150 percent declining-balance with a switch to straight-line when it will maximize depreciation

expense.

Which of the following is not a special journal:

- Sales journal.

- Purchases journal.

- Cash receipts journal.

- General journal.

- Cash disbursements journal.

Explain under what circumstances a net operating loss of a partnership can be carried over and applied against income of a partner even after the 20-year carryover period provided for net operating loss carryovers has expired.

Do some research to find the 2018 balance sheets for Macy’s and Nordstrom online. For each company, navigate to the company’s website, then scroll down to investors or investor relations, 2018 annual report, and locate their 2018 balance sheet.

Identify and describe the company’s three most significant accounts in the following areas:

• Current assets
• Long-term asset
• Current liabilities
• Long-term liabilities
• Stockholders’ equity

How do these two retailer’s balance sheets compare? Which company do you feel is healthier?

Developing a Master Budget for a Manufacturing Organization

Jacobs Incorporated manufactures a product with a selling price of $50 per unit. Units and monthly cost data follow:

Jacobs pays all bills in the month incurred. All sales are on account with 50 percent collected the month of sale and the balance collected the following month. There are no sales discounts or bad debts. Jacobs desires to maintain an ending finished goods inventory equal to 20 percent of the following month's sales and a raw materials inventory equal to 10 percent of the following month's production. January 1, 2014, inventories are in line with these policies. Actual unit sales for December and budgeted unit sales for January, February, and March of 2014 are as follows:

Additional information:

• The January 1 beginning cash is projected as $5,000.
• For the purpose of operational budgeting, units in the January 1 inventory of finished goods are valued at variable manufacturing cost.
• Each unit of finished product requires one unit of raw materials.
• Jacobs intends to pay a cash dividend of $10,000 in January.

NOTE: For the entire problem - do not use any negative signs with your answers unless appropriate for net income(loss) or ending balance.

(a) A production budget for January and February.

(b) A purchases budget in units for January.

(c) A manufacturing cost budget for January.

(d) A cash budget for January.

(e) A budgeted contribution income statement for January.

Access the EDGAR database (SEC.gov) and obtain the July 2018 form 10K filing (for the year ended May 31, 2018) for NIKE, Inc. Prepare a table that reports the gross margin ratios for NIKE, using the revenues and cost of goods sold data from NIKE's income statement for each of it's most recent three years. Analyze and comment on trend in its gross margin ratio. Use complete sentences and good grammar. Feel free to access the Management Discussion and Analysis in the 10K to see if management had anything to say about the trend. Earn 10 points if you complete all elements of the assignment. You may comment on another students submission but you are not required to do so.