STORE 5

NET SALES = ?

COST OF GOODS SOLD = $90.0

GROSS MARGIN-DOLLARS = ?

GROSS MARGIN-PERCENT = ?

EXPENSE-DOLLARS = $41.1

EXPENSE-PERCENT = ?

NET INCOME-DOLLARS = $0.5

NET INCOME-PERCENT = ?

A 20 year loan of $120, 000 at i = 6% is paid off by paying 130% of each year’s interest at the end of each year for the first 12 years, and then for the next 8 years pay off the loan by paying off constant principle at the end of each year. Find the value of the last payment.

On January 1, a company issues bonds dated January 1 with a par value of $390,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $405,830. The journal entry to record the first interest payment using straight-line amortization is: (Rounded to the nearest dollar.)

Characteristics of Production Process, Cost Measurement

Vince Melders, of EcoScape Company, designs and installs custom lawn and garden irrigation systems for homes and businesses throughout the state. Each job is different, requiring different materials and labor for installing the systems. EcoScape estimated the following for the year:

During the year, the following actual amounts were experienced:

Vince Melders, owner of EcoScape, noticed that the watering systems for many houses in a local subdivision had the same layout and required virtually identical amounts of prime cost. Vince met with the subdivision builders and offered to install a basic watering system in each house. The idea was accepted enthusiastically, so Vince created a new company, Irrigation Specialties, to handle the subdivision business. In its first three months in business, Irrigation Specialties experienced the following:

Required:

1. Should Irrigation Specialties use process costing or job-order costing?

2. If Irrigation Specialties uses an actual costing system, what is the cost of a single system installed in June? In July? In August? Round your answers to the nearest dollar.

3. Now assume that Irrigation Specialties uses a normal costing system. Estimated overhead for the year is $47,500, and estimated production is 500 watering systems. What is the predetermined overhead rate per system?

$ per system installed

What is the cost of a single system installed in June? In July? In August?

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.)