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.

Davis, Inc., had the following quality costs for the years ended December 31, 20x4 and 20x5:

At the end of 20x4, management decided to increase its investment in control costs by 50 percent for each category’s items with the expectation that failure costs would decrease by 20 percent for each item of the failure categories. Sales were $12,500,000 for both 20x4 and 20x5.

Required:

1. Calculate the budgeted costs for 20x5.

$

Prepare an interim quality performance report. Enter all answers as positive amounts. If there is no variance enter "0" for your answer. If the budget variance amount is unfavorable select "Unfavorable" in the last column of the table, select "Favorable" if it is favorable, or No effect if there is no change. Round percentage answers to two decimal places. For example, 5.789% would be entered as "5.79".

2. What can be inferred from the report regarding the progress Davis has made?

3. What if sales were $12,500,000 for 20x4 and $15,625,000 for 20x5? What adjustment to budgeted rework costs would be made? (Note: Quality auditing is a discretionary cost and its budget is not affected by the change in sales revenue in 20x5.)

New total budgeted rework costs: $

The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reports—the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 61 students enrolled in those two courses. Data concerning the company’s cost formulas appear below:

For example, administrative expenses should be $3,900 per month plus $42 per course plus $4 per student. The company’s sales should average $880 per student.

The company planned to run four courses with a total of 61 students; however, it actually ran four courses with a total of only 57 students. The actual operating results for September appear below:

Required:

Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Denzel Brooks opens a web consulting business called Venture Consultants and completes the following transactions in March.
Using the following transactions, record journal entries, create financial statements, and assess the impact of each transaction on the financial statements.
  

Need help completing this income statement:

1.What are some of the common problems users encounter when trying to compare financial statements of companies (even when they are in the same industry)? Describe how using XBRL could help alleviate these problems.

2. What are the current XBRL filing requirements for publicly-listed firms in the US?

3. Why should a business create XBRL-enabled financial reports?

4. Does the FDIC require banks to file any report(s) using XBRL? If so, which reports?

The following events occur for The Underwood Corporation during 2018 and 2019, its first two years of operations.
  

June 12, 2018 Provide services to customers on account for $36,200.

September 17, 2018 Receive $21,000 from customers on account.

December 31, 2018 Estimate that 45% of accounts receivable at the end of the year will not be received.

March 4, 2019 Provide services to customers on account for $51,200.

May 20, 2019 Receive $10,000 from customers for services provided in 2018.

July 2, 2019 Write off the remaining amounts owed from services provided in 2018.

October 19, 2019 Receive $41,000 from customers for services provided in 2019.

December 31, 2019 Estimate that 45% of accounts receivable at the end of the year will not be received.

Celestial Artistry Company is developing departmental overhead rates based on direct-labor hours for its two production departments, Etching and Finishing. The Etching Department employs 20 people and the Finishing Department employs 80 people. Each person in these two departments works 2,000 hours per year. The production-related overhead costs for the Etching Department are budgeted at $200,000, and the Finishing Department costs are budgeted at $320,000. Two service departments, Maintenance and Computing, directly support the two production departments. These service departments have budgeted costs of $48,000 and $250,000, respectively. The production departments’ overhead rates cannot be determined until the service departments’ costs are allocated. The following schedule reflects the use of the Maintenance Department’s and Computing Department’s output by the various departments.

2. Use the step-down method to allocate service department costs. Allocate the Computing Department’s costs first. Calculate the overhead rates per direct-labor hour for the Etching Department and the Finishing Department. (Do not round intermediate calculations. Round "Overhead rate per hour" to 3 decimal places and other answers to the nearest dollar amount.)

Milbank Repairs & Service, an electronics repair store, prepared the following unadjusted trial balance at the end of its first year of operations:

For preparing the adjusting entries, the following data were assembled:

Required:

• Fees earned but unbilled on June 30 were $8,980.
• Supplies on hand on June 30 were $7,330.
• Depreciation of equipment was estimated to be $12,410 for the year.
• The balance in unearned fees represented the June 1 receipt in advance for services to be provided. During June $17,260 of the services was provided.
• Unpaid wages accrued on June 30 were $1,590.

1. Journalize the adjusting entries necessary on June 30, 2019.

Feedback

1. Keep in mind that you will be making an adjusting entry for each of these that affects at least one income statement account (revenue or expense) and one balance sheet account (asset or liability). As you go through each of these, consider both sides of the transaction that results in an adjusting entry and identify related accounts. Remember, four different categories of adjusting entries include prepaid expenses (deferred expenses), unearned revenues (deferred revenues), accrued expenses (accrued liabilities), and accrued revenues (accrued assets) plus the adjustment for depreciation expense.

2. Determine the revenues, expenses, and net income of Milbank Repairs & Service before the adjusting entries.

3. Determine the revenues, expenses, and net income of Milbank Repairs & Service after the adjusting entries.

4. Determine the effect of the adjusting entries on Nancy Townes, Capital.
Nancy Townes, Capital decreases  by $.

Inventory information for Part 311 of Bramble Corp. discloses the following information for the month of June.

Assuming that the perpetual inventory method is used and costs are computed at the time of each withdrawal, what is the value of the ending inventory at LIFO?

Assuming that the perpetual inventory method is used and costs are computed at the time of each withdrawal, what is the gross profit if the inventory is valued at FIFO?