Questions
Prepare a Production Cost Report: FIFO Method (LO 8-2, 4, 5) Lansing, Inc. provides the following...

Prepare a Production Cost Report: FIFO Method

(LO 8-2, 4, 5)

Lansing, Inc. provides the following information for one of its department’s operations for June (no new material is added in Department T):

WIP inventory—Department T
Beginning inventory (15,000 units, 60% complete with respect to Department T costs)
Transferred-in costs (from Department S) $ 116,000
Department T conversion costs 53,150
Current work (35,000 units started)
Prior department costs 280,000
Department T costs 209,050
The ending inventory has 5,000 units, which are 20 percent complete with respect to Department T costs and 100 percent complete for prior department costs.
Required

Prepare a production cost report using FIFO.

In: Accounting

The Westchester Chamber of Commerce periodically sponsors public service seminars and programs. Currently, promotional plans are...

The Westchester Chamber of Commerce periodically sponsors public service seminars and programs. Currently, promotional plans are under way for this year’s program. Advertising alternatives include television, radio, and newspaper. Audience estimates, costs, and maximum media usage limitations are as shown: Constraint Television Radio Newspaper Audience per advertisement 100000 18000 40000 Cost per advertisement $1400 $300 $600 Maximum media usage 10 20 10 To ensure a balanced use of advertising media, radio advertisements must not exceed 50% of the total number of advertisements authorized. In addition, television should account for at least 10% of the total number of advertisements authorized. If the promotional budget is limited to $21,200, how many commercial messages should be run on each medium to maximize total audience contact? What is the allocation of the budget among the three media? If required, round your answers to the nearest dollar. Let T = number of television spot advertisements R = number of radio advertisements N = number of newspaper advertisements Budget ($) T = R = N = Total Budget = $ What is the total audience reached? Round your answer to the nearest whole number. By how much would audience contact increase if an extra $100 were allocated to the promotional budget? Round your answer to the nearest whole number.

In: Accounting

One of the benefits of Data Analytics is the ability to see and test the full...

One of the benefits of Data Analytics is the ability to see and test the full population. In that case, why is sampling (even monetary sampling) still used, and how is it useful?

In: Accounting

1. Explain that auditor’s public interest responsibility including the source of their responsibility they extends to...

1. Explain that auditor’s public interest responsibility including the source of their responsibility they extends to which they embrace this responsibility & tangible ways that entry-level auditors can embrace this responsibility?

2. Explain the concept of professional skepticism including its underlying attributes and in addition to describing the different approaches to professional skepticism and how they are used in audit?

3. Applied question(use example):1. Use of example of testing revenue explain the steps and performance of standard analytical produces 2. Using the example of testing sales, returns and allowances explain the process of testing accountants

4. Although auditors are required to exercise professional judgment they are human and thus prune to a number of judgment traps, bias, Explain at least three of the typical judgement traps

In: Accounting

What key questions does a Master Budget for Manufacturing Companies answer?

What key questions does a Master Budget for Manufacturing Companies answer?

In: Accounting

The trial balance of pacillo security services inc as of January 1 2018 had the following...

The trial balance of pacillo security services inc as of January 1 2018 had the following normal balances

               Cash-                                                                                               $93,708

               Petty Cash-    100

               Accounts Receivable- 22,540

               Allowance for doubtful accounts- 1,334

               Supplies- 250

               Prepaid rent-    3,600

               Merchandise inventory (18@$285)-    5,130

               Land- 4,000

               Salaries Payable-    2,100

               Common Stock-    50,000

               Retained Earnings- 75,894

During 2018 Pacillo Security Services experienced the following transactions:

  1. Paid the salaries payable from 2017
  2. Purchased equipment and van for a lump sum of $36,000 cash on January 2, 2018. The equipment was appraised for $10,000 and the van was appraised for $30,000.
  3. Paid $9,000 on May 1, 2018, for one year’s office rent in advance
  4. Purchased $300 of supplies on account.
  5. Purchased 120 alarm systems at a cost of $280 each. Paid cash for the purchase.
  6. After numerous attempts to collect from customers, wrote off $2,350 of uncollectible accounts receivable.
  7. Sold 115 alarm systems for $580 each. All sales were on account. (Be sure to compute cost of goods sold using the FIFO cost flow method.)
  8. Billed $86,000 of monitoring services for the year. Credit card sales amounted to $36,000, and the credit card company charged a 4% fee. The remaining $50,000 were sales on account.
  9. Replenished the petty cash fund on Jun 30. The fund had $12 cash and receipts of $45 for yard mowing, $28 for office supplies expense, and $11 for miscellaneous expenses.
  10. Collected the amount due from the credit card company.
  11. Paid installers and other employees a total of $52,000 cash for salaries.
  12. Collected $115,500 of accounts receivable during the year.
  13. Paid $12,500 of advertising expense during the year.
  14. Paid $6,800 of utilities expense for the year.
  15. Sold the land, which was purchased in 2011, for $12,000.
  16. Paid the accounts payable.
  17. Paid a dividend of $10,000 to shareholders

Adjustments

  1. Determined that $180 of supplies were on hand at the end of the year.
  2. Recognized the expired rent for both the old van and the office building for the year. The lease on the van was not renewed. Rent Paid on March 1, 2017, for the van was $4,800.
  3. Recognized uncollectible accounts expense for the year using the allowance method. Pacilio estimates that 3% of sales on account will not be collected.
  4. Recognized depreciation expense on the equipment and the van. The equipment has a five-year life and a $2,000 salvage value. The van has a four-year life and $6,000 salvage value. The company uses double-declining balance for the van and straight-straight line for the equipment.
  5. Accrued salaries at December 31, 2018, were $1,500.

DIRECTIONS: PREPARE AN INCOME STATEMENT, A STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY, AND A BALANCE SHEET

In: Accounting

Assume that Oceanview’s long term debt to owner’s equity makes you believe that it cannot remain...

  1. Assume that Oceanview’s long term debt to owner’s equity makes you believe that it cannot remain in business for much longer and that it is discussed, along with management’s plans, in Note 8 of the financial statements. Type out the paragraph you would add to the Standard Report based on this information.
  2. Assume that Oceanview has recorded sales of $70,000 at the end of the period that you believe should not have been recognized until the next fiscal year. Management refuses to adjust the financial statements, so you decide to issue a qualified opinion. Type out the two paragraphs that you would add to/modify in the Standard Report based on this information.

In: Accounting

CSU, Inc., is a calendar year S corporation. CSU’s Form 1120S shows nonseparately stated ordinary income...

CSU, Inc., is a calendar year S corporation. CSU’s Form 1120S shows nonseparately stated ordinary income of $120,000 for the year. Taewon owns 30% of the CSU stock throughout the year. The following information is obtained from the corporate records.

Tax-exempt interest income

$ 4,500

Salary paid to Taewon

(78,000)

Charitable contributions

(9,000)

Dividends received from a non-U.S. corporation

7,500

Short-term capital loss

(9,000)

Depreciation recapture income

16,500

Refund of prior state income taxes

7,500

Cost of goods sold

($108,000)

Long-term capital loss

(10,500)

Administrative expenses

(27,000)

Long-term capital gain

21,000

Selling expenses

(16,500)

Taewon’s beginning stock basis

48,000

Taewon’s additional stock purchases

13,500

Beginning AAA

46,500

Taewon’s loan to corporation

30,000

  1. Compute CSU’s taxable income or loss, showing the calculation (on a “white paper” schedule not on IRS forms). Taxable income should equal Form 1120S, Schedule K, line 18, which should be the same as Form 1120S, Schedule M-1, line 8. Assume the I.R.C. section 1374 and 1375 taxes do not apply. HINT: the refund of prior state income taxes is taxable other income. TI check figure $127,500.

In: Accounting

The Bradford Company issued 12% bonds, dated January 1, with a face amount of $96 million...

The Bradford Company issued 12% bonds, dated January 1, with a face amount of $96 million on January 1, 2018. The bonds mature on December 31, 2027 (10 years). For bonds of similar risk and maturity, the market yield is 14%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price of the bonds at January 1, 2018. 2. to 4. Prepare the journal entry to record their issuance by The Bradford Company on January 1, 2018, interest on June 30, 2018 and interest on December 31, 2018 (at the effective rate).

In: Accounting

What are ABC trusts and how are they used for estate planning purposes?

What are ABC trusts and how are they used for estate planning purposes?

In: Accounting

Analytical procedures are required on every audit. Should the procedure be performed before or after the...

Analytical procedures are required on every audit.

  1. Should the procedure be performed before or after the calculation of the expected result?
  2. If the result of an analytical procedure differs significantly from the expectation, is that conclusive evidence that there is an error in the books?
  3. If the result of an analytical procedure differing significantly from the expectation does not necessarily mean the books are in error, what does it mean?

In: Accounting

Smart Company prepared its annual financial statements dated December 31, 2020. The company applies the FIFO...

Smart Company prepared its annual financial statements dated December 31, 2020. The company applies the FIFO inventory costing method; however, the company neglected to apply the LC&NRV valuation to the ending inventory. The preliminary 2020 statement of earnings follows:

Sales revenue $ 297,000
Cost of sales
Beginning inventory $ 32,700
Purchases 201,000
Cost of goods available for sale 233,700
Ending inventory (FIFO cost) 75,536
Cost of sales 158,164
Gross profit 138,836
Operating expenses 63,700
Pretax earnings 75,136
Income tax expense (40%) 30,054
Net earnings $ 45,082


Assume that you have been asked to restate the 2020 financial statements to incorporate the LC&NRV inventory valuation rule. You have developed the following data relating to the ending inventory at December 31, 2020:

Acquisition Cost
Item Quantity Unit Total Net Realizable Value
A 3,220 $ 4.70 $ 15,134 $ 5.70
B 1,670 6.70 11,189 5.20
C 7,270 3.20 23,264 5.20
D 3,370 7.70 25,949 5.70
$ 75,536

1. Restate the statement of earnings to reflect the valuation of the ending inventory on December 31, 2020, at the LC&NRV. Apply the LC&NRV rule on an item-by-item basis.(FINISHED BELOW ANSWER QUESTION 2)

SMART COMPANY
Statement of Earnings (LC&NRV Basis)
For the Year Ended December 31, 2020
Sales revenue $297,000
Cost of sales:
Beginning inventory $32,700
Purchases 201,000
Cost of goods available for sale 233,700
Ending inventory 66,291
Cost of sales 167,409
Gross profit 129,591
Operating expense 63,700
Pretax earnings 65,891
Income tax expense 26,356
Net earnings $39,535

2. Compare and explain the LC&NRV effect on each amount that was changed in part 1. (Negative answers should be indicated by a minus sign.)

In: Accounting

One of the differences between Managerial Accounting and Financial Accounting is reporting flexibility. Financial reporting is...

One of the differences between Managerial Accounting and Financial Accounting is reporting flexibility. Financial reporting is restricted by Generally Accepted Accounting Principles whereas reporting in Managerial Accounting has fewer rules.

Why is it permissible to violate Generally Accepted Accounting Principles when preparing reports used strictly by company management? Should external users always have the same information as internal users?

In: Accounting

On April 1, 2017, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions...

On April 1, 2017, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company’s first month.

April 1 Nozomi invested $34,000 cash and computer equipment worth $25,000 in the company in exchange for common stock.
2 The company rented furnished office space by paying $2,000 cash for the first month’s (April) rent.
3 The company purchased $1,400 of office supplies for cash.
10 The company paid $2,300 cash for the premium on a 12-month insurance policy. Coverage begins on April 11.
14 The company paid $1,300 cash for two weeks' salaries earned by employees.
24 The company collected $18,500 cash on commissions from airlines on tickets obtained for customers.
28 The company paid $1,300 cash for two weeks' salaries earned by employees.
29 The company paid $550 cash for minor repairs to the company's computer.
30 The company paid $1,150 cash for this month's telephone bill.
30 The company paid $2,500 cash in dividends.

The company's chart of accounts follows:

101 Cash 405 Commissions Earned
106 Accounts Receivable 612 Depreciation Expense—Computer Equip.
124 Office Supplies 622 Salaries Expense
128 Prepaid Insurance 637 Insurance Expense
167 Computer Equipment 640 Rent Expense
168 Accumulated Depreciation—Computer Equip. 650 Office Supplies Expense
209 Salaries Payable 684 Repairs Expense
307 Common Stock 688 Telephone Expense
318 Retained Earnings 901 Income Summary
319 Dividends

Use the following information:

  1. Two-thirds (or $128) of one month’s insurance coverage has expired.
  2. At the end of the month, $700 of office supplies are still available.
  3. This month’s depreciation on the computer equipment is $500.
  4. Employees earned $600 of unpaid and unrecorded salaries as of month-end.
  5. The company earned $1,750 of commissions that are not yet billed at month-end.

Required:
1. & 2. Prepare journal entries to record the transactions for April and post them to the ledger accounts in Requirement 6b. The company records prepaid and unearned items in balance sheet accounts.
3. Using account balances from Requirement 6b, prepare an unadjusted trial balance as of April 30.
4. Journalize and post the adjusting entries for the month and prepare the adjusted trial balance.
5a. Prepare the income statement for the month of April 30, 2017.
5b. Prepare the statement of retained earnings for the month of April 30, 2017.
5c. Prepare the balance sheet at April 30, 2017.
6a. Prepare journal entries to close the temporary accounts and then post to Requirement 6b.
6b. Post the journal entries to the ledger.
7. Prepare a post-closing trial balance.

In: Accounting

Average Rate of Return Method, Net Present Value Method, and Analysis The capital investment committee of...

Average Rate of Return Method, Net Present Value Method, and Analysis

The capital investment committee of Ellis Transport and Storage Inc. is considering two investment projects. The estimated income from operations and net cash flows from each investment are as follows:

Warehouse Tracking Technology
Year Income from
Operations
Net Cash
Flow
Income from
Operations
Net Cash
Flow
1 $44,000 $143,000 $92,000 $229,000
2 44,000 143,000 70,000 193,000
3 44,000 143,000 35,000 136,000
4 44,000 143,000 15,000 93,000
5 44,000 143,000 8,000 64,000
Total $220,000 $715,000 $220,000 $715,000

Each project requires an investment of $400,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 10% for purposes of the net present value analysis.

Present Value of $1 at Compound Interest
Year 6% 10% 12% 15% 20%
1 0.943 0.909 0.893 0.870 0.833
2 0.890 0.826 0.797 0.756 0.694
3 0.840 0.751 0.712 0.658 0.579
4 0.792 0.683 0.636 0.572 0.482
5 0.747 0.621 0.567 0.497 0.402
6 0.705 0.564 0.507 0.432 0.335
7 0.665 0.513 0.452 0.376 0.279
8 0.627 0.467 0.404 0.327 0.233
9 0.592 0.424 0.361 0.284 0.194
10 0.558 0.386 0.322 0.247 0.162

Required:

1a. Compute the average rate of return for each investment. If required, round your answer to one decimal place.

Average Rate of Return
Warehouse %
Tracking Technology %

1b. Compute the net present value for each investment. Use the present value of $1 table above. If required, use the minus sign to indicate a negative net present value.

Warehouse Tracking Technology
Present value of net cash flow total $ $
Less amount to be invested $ $
Net present value $ $

2. The warehouse has a   net present value as tracking technology cash flows occur   in time. Thus, if only one of the two projects can be accepted, the   would be the more attractive.

In: Accounting