Scooters plans to sell a standard scooter for $ 120 and a chrome scooter for $ 160. Steve's purchases the standard scooter for $ 30 and the chrome scooter for $ 40. Steve's expects to sell one standard scooter for every three chrome scooters. Steve's monthly fixed costs are $ 85,500.
1. How many of each type of scooter must Steve's Scooters sell each month to break even?
(Fixed costs + Target profit)/ Weighted-avg. CM per unit = Required sales in units
Standard Scooter formula: ______+_____/_____= required sales in units
Chrome Scooter formula: ______+_____/_____= required sales in units
Stevie's must sell ____ standard scooters and _____ Chrome scooters to break even.
2. How many of each type of scooter must Steve's Scooters sell each month to earn $ 67,500?
Standard Scooter formula: ______+_____/_____= required sales in units
Chrome Scooter formula: ______+_____/_____= required sales in units
Stevie's must sell ____ standard scooters and _____ Chrome scooters.
3. Suppose Steve's expectation to sell one standard scooter for every three chrome scooters was incorrect and for every four scooters sold two are standard scooters and two are chrome scooters. Will the breakeven point of total scooters increase or decrease? Why? (Calculation not required.)
Each standard scooter contributes $____ to profits while each chrome scooter contributes$_____ to profit.Therefore, the increase in sales of standard scooters and decrease in chrome scooters woud cause the weighted average contribution margin to _______ and the break even point to _______.
I am stuck at how to find the weighted-avg. CM per unit.
In: Accounting
Sequential Method
Jasmine Company manufactures both pesticide and liquid fertilizer, with each product manufactured in separate departments. Three support departments support the production departments: Power, General Factory, and Purchasing. Budgeted data on the five departments are as follows:
Support Departments |
Producing Departments | ||||
| Power | General Factory |
Purchasing | Pesticide | Liquid Fertilizer |
|
| Overhead | $80,000 | $314,000 | $165,000 | $78,800 | $107,700 |
| Square feet | 1,500 | — | 1,500 | 4,200 | 4,800 |
| Machine hours | — | 1,403 | 1,345 | 24,000 | 8,000 |
| Purchase orders | 20 | 40 | — | 120 | 60 |
The company does not break overhead into fixed and variable components. The bases for allocation are power—machine hours; general factory—square feet; and purchasing—purchase orders.
The company has decided to use the sequential method of allocation instead of the direct method. The support departments are ranked in order of highest cost to lowest cost.
Required:
1. Allocate the overhead costs to the producing departments using the sequential method. Carry out allocation ratios to four decimal places. Use these numbers for subsequent calculations. Round allocated costs to the nearest dollar. If an amount is zero, enter "0".
Allocation ratios:
| Power | General Factory | Purchasing | Pesticide | Liquid Fertilizer | |
| Square feet | |||||
| Machine hours | |||||
| Purchase orders |
Cost allocation:
| Power | General Factory | Purchasing | Pesticide | Liquid Fertilizer | |
| Direct costs | $ | $ | $ | $ | $ |
| General Factory | |||||
| Purchasing | |||||
| Power | |||||
| Total | $ | $ | $ | $ | $ |
2. Using machine hours, compute departmental overhead rates. (Round the overhead rates to the nearest cent.)
| Overhead Rates | |
| Pesticide | $ per machine hour |
| Liquid Fertilizer | $ per machine hour |
In: Accounting
Please answer the following questions:
a) What is confidentiality and privacy controls in accounting information system?
b) How to identify and classify information that to be protected and how to protect confidentiality using encryption?
c) What is privacy regulations and generally accepted privacy principles?
In: Accounting
Service! Read through the discussion on service characteristics, service gaps and service recovery/failure in Chapter 13, then answer the following questions: Which of the four characteristics differentiating services from product do you think leads to the most service failures and why? Please be sure to briefly explain the characteristic that you select. You’ve heard the saying “the customer is always right.” Do you think that’s true? Why or why not? Provide a specific situation you (as a customer) have faced a service failure: What were your expectations going into the service situation… and how did the service provider fail to meet your expectations? Was the service failure a result of service heterogeneity/variability or was it a result of the employee not being empowered to properly assist you – please explain.
In: Accounting
Building Your Skills Case [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10] You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various retail outlets located in shopping malls across the country. In the past, the company has done very little in the way of budgeting and at certain times of the year has experienced a shortage of cash. Since you are well trained in budgeting, you have decided to prepare a master budget for the upcoming second quarter. To this end, you have worked with accounting and other areas to gather the information assembled below. The company sells many styles of earrings, but all are sold for the same price—$15 per pair. Actual sales of earrings for the last three months and budgeted sales for the next six months follow (in pairs of earrings): January (actual) 21,000 June (budget) 51,000 February (actual) 27,000 July (budget) 31,000 March (actual) 41,000 August (budget) 29,000 April (budget) 66,000 September (budget) 26,000 May (budget) 101,000 The concentration of sales before and during May is due to Mother’s Day. Sufficient inventory should be on hand at the end of each month to supply 40% of the earrings sold in the following month. Suppliers are paid $4.50 for a pair of earrings. One-half of a month’s purchases is paid for in the month of purchase; the other half is paid for in the following month. All sales are on credit. Only 20% of a month’s sales are collected in the month of sale. An additional 70% is collected in the following month, and the remaining 10% is collected in the second month following sale. Bad debts have been negligible. Monthly operating expenses for the company are given below: Variable: Sales commissions 4 % of sales Fixed: Advertising $ 250,000 Rent $ 23,000 Salaries $ 116,000 Utilities $ 9,500 Insurance $ 3,500 Depreciation $ 19,000 Insurance is paid on an annual basis, in November of each year. The company plans to purchase $18,500 in new equipment during May and $45,000 in new equipment during June; both purchases will be for cash. The company declares dividends of $18,750 each quarter, payable in the first month of the following quarter. The company’s balance sheet as of March 31 is given below: Assets Cash $ 79,000 Accounts receivable ($40,500 February sales; $492,000 March sales) 532,500 Inventory 118,800 Prepaid insurance 23,500 Property and equipment (net) 1,000,000 Total assets $ 1,753,800 Liabilities and Stockholders’ Equity Accounts payable $ 105,000 Dividends payable 18,750 Common stock 900,000 Retained earnings 730,050 Total liabilities and stockholders’ equity $ 1,753,800 The company maintains a minimum cash balance of $55,000. All borrowing is done at the beginning of a month; any repayments are made at the end of a month. The company has an agreement with a bank that allows the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. At the end of the quarter, the company would pay the bank all of the accumulated interest on the loan and as much of the loan as possible (in increments of $1,000), while still retaining at least $55,000 in cash. Required: Prepare a master budget for the three-month period ending June 30. Include the following detailed schedules: 1. a. A sales budget, by month and in total. b. A schedule of expected cash collections, by month and in total. c. A merchandise purchases budget in units and in dollars. Show the budget by month and in total. d. A schedule of expected cash disbursements for merchandise purchases, by month and in total. 2. A cash budget. Show the budget by month and in total. Determine any borrowing that would be needed to maintain the minimum cash balance of $55,000. 3. A budgeted income statement for the three-month period ending June 30. Use the contribution approach. 4. A budgeted balance sheet as of June 30
In: Accounting
Waving Through the Window
You and your two roommates are starting a window washing service to help put yourself through college. There are two other well-established window washing services in your area.
One roommate believes the most important objective in setting prices for the business is to generate a large profit, while keeping an eye on your competitors’ prices; the other roommate believes it is important to maximize sales and set prices according to what your customers expect to pay.
In: Accounting
Here are comparative statement data for Wildhorse Company and
Sandhill Company, two competitors. All balance sheet data are as of
December 31, 2022, and December 31, 2021.
|
Wildhorse Company |
Sandhill Company |
|||||||
|---|---|---|---|---|---|---|---|---|
|
2022 |
2021 |
2022 |
2021 |
|||||
|
Net sales |
$1,892,000 | $580,000 | ||||||
|
Cost of goods sold |
1,075,000 | 298,000 | ||||||
|
Operating expenses |
260,000 | 87,000 | ||||||
|
Interest expense |
8,200 | 2,200 | ||||||
|
Income tax expense |
65,300 | 29,000 | ||||||
|
Current assets |
498,742 | $477,987 | 127,504 | $ 121,585 | ||||
|
Plant assets (net) |
806,004 | 765,000 | 213,784 | 192,492 | ||||
|
Current liabilities |
101,477 | 115,997 | 54,082 | 46,330 | ||||
|
Long-term liabilities |
174,405 | 137,700 | 45,319 | 38,250 | ||||
|
Common stock, $10 par |
765,000 | 765,000 | 183,600 | 183,600 | ||||
|
Retained earnings |
263,864 | 224,290 | 58,287 | 45,897 | ||||
(a)
Prepare a vertical analysis of the 2022 income statement data for
Wildhorse Company and Sandhill Company. (Round all
ratios to 1 decimal place, e.g. 2.5%.)
|
Condensed Income Statement |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
|
Wildhorse Company |
Sandhill Company |
||||||||
|
Dollars |
Percent |
Dollars |
Percent |
||||||
|
select an income statement item Total ExpensesTotal Operating ExpensesDividendsCost of Goods SoldSales RevenuesIncome From OperationsNet SalesIncome Tax ExpenseOther Revenues and GainsOther Expenses and LossesExpensesOperating ExpensesGross ProfitInterest ExpenseRetained Earnings, December 31Retained Earnings, January 1Income Before Income TaxesNet Income / (Loss)Total Revenues |
$1,892,000 |
enter percentages |
% |
$580,000 |
enter percentages |
% |
|||
|
select an income statement item Total ExpensesTotal Operating ExpensesExpensesTotal RevenuesGross ProfitCost of Goods SoldNet Income / (Loss)Income Before Income TaxesSales RevenuesNet SalesInterest ExpenseOther Expenses and LossesIncome From OperationsOther Revenues and GainsRetained Earnings, December 31Operating ExpensesDividendsIncome Tax ExpenseRetained Earnings, January 1 |
1,075,000 |
enter percentages |
% |
298,000 |
enter percentages |
% |
|||
|
select a summarizing line for the first part Cost of Goods SoldDividendsOther Revenues and GainsNet SalesTotal ExpensesSales RevenuesGross ProfitIncome Tax ExpenseRetained Earnings, December 31Operating ExpensesIncome Before Income TaxesIncome From OperationsExpensesNet Income / (Loss)Other Expenses and LossesTotal RevenuesInterest ExpenseRetained Earnings, January 1Total Operating Expenses |
817,000 |
enter percentages |
% |
282,000 |
enter percentages |
% |
|||
|
select an income statement item Net SalesIncome From OperationsCost of Goods SoldOther Expenses and LossesDividendsOther Revenues and GainsIncome Tax ExpenseExpensesTotal ExpensesNet Income / (Loss)Interest ExpenseTotal Operating ExpensesIncome Before Income TaxesRetained Earnings, January 1Retained Earnings, December 31Total RevenuesGross ProfitSales RevenuesOperating Expenses |
260,000 |
enter percentages |
% |
87,000 |
enter percentages |
% |
|||
|
select a summarizing line for the second part Income Tax ExpenseCost of Goods SoldNet Income / (Loss)Income From OperationsNet SalesTotal Operating ExpensesGross ProfitIncome Before Income TaxesDividendsOther Expenses and LossesTotal RevenuesInterest ExpenseTotal ExpensesExpensesOperating ExpensesSales RevenuesOther Revenues and GainsRetained Earnings, January 1Retained Earnings, December 31 |
557,000 |
enter percentages |
% |
195,000 |
enter percentages |
% |
|||
|
select an opening section name Operating ExpensesSales RevenuesTotal ExpensesGross ProfitIncome Before Income TaxesCost of Goods SoldExpensesRetained Earnings, December 31Net Income / (Loss)Income From OperationsRetained Earnings, January 1Other Expenses and LossesIncome Tax ExpenseTotal Operating ExpensesNet SalesTotal RevenuesDividendsOther Revenues and GainsInterest Expense |
|||||||||
|
select an income statement item Interest ExpenseNet SalesGross ProfitTotal Operating ExpensesRetained Earnings, January 1Other Revenues and GainsExpensesIncome Tax ExpenseIncome From OperationsRetained Earnings, December 31Total ExpensesSales RevenuesOperating ExpensesNet Income / (Loss)Total RevenuesCost of Goods SoldIncome Before Income TaxesOther Expenses and LossesDividends |
8,200 |
enter percentages |
% |
2,200 |
enter percentages |
% |
|||
|
select a summarizing line for the third part Other Revenues and GainsGross ProfitExpensesIncome Tax ExpenseRetained Earnings, January 1Total RevenuesRetained Earnings, December 31Total Operating ExpensesIncome Before Income TaxesIncome From OperationsDividendsSales RevenuesNet Income / (Loss)Net SalesInterest ExpenseCost of Goods SoldOther Expenses and LossesTotal ExpensesOperating Expenses |
548,800 |
enter percentages |
% |
192,800 |
enter percentages |
% |
|||
|
select an income statement item Interest ExpenseExpensesTotal RevenuesGross ProfitTotal ExpensesNet SalesCost of Goods SoldRetained Earnings, January 1Total Operating ExpensesIncome From OperationsRetained Earnings, December 31Net Income / (Loss)DividendsOperating ExpensesSales RevenuesIncome Before Income TaxesOther Revenues and GainsIncome Tax ExpenseOther Expenses and Losses |
65,300 |
enter percentages |
% |
29,000 |
enter percentages |
% |
|||
|
select a closing name for this statement ExpensesIncome From OperationsNet SalesOperating ExpensesNet Income / (Loss)Total ExpensesIncome Tax ExpenseCost of Goods SoldOther Expenses and LossesRetained Earnings, January 1Interest ExpenseTotal RevenuesIncome Before Income TaxesOther Revenues and GainsTotal Operating ExpensesSales RevenuesDividendsRetained Earnings, December 31Gross Profit |
$483,500 |
enter percentages |
% |
$163,800 |
enter percentages |
% |
|||
(b1)
Compute the 2022 return on assets and the return on common
stockholders’ equity for both companies. (Round all
ratios to 1 decimal place, e.g. 2.5%.)
|
Wildhorse Company |
Sandhill Company |
|||||
|---|---|---|---|---|---|---|
|
Return on assets |
enter percentages |
% |
enter percentages |
% |
||
|
Return on common stockholders’ equity |
enter percentages |
% |
enter percentages |
% |
||
In: Accounting
Use 3 paragraphs: Briefly describe and distinguish the 'planning' and 'control' aspects of management accounting. Give examples of how management accounting information is used for both planning and control purposes in your organization.
In: Accounting
You set up your own business in merchandising sector. You lease a space of 6,000 square feet to open a luxury watch shop.
The following is minimum information regarding the business:
- Specific sub-sector: Merchandising sector.
- Business model: buying and selling luxury watches.
- Investment by owner: $1,000,000
- You hire a shop manager, two accounting staffs who also keep the merchandise, one security officer, and 8 full-time sales assistants.
- Business costs/expenses should have at least the following: cost of merchandise sold, rent expense, salary, utilities expense, advertising expense, interest expense, and miscellaneous expenses.
-Capital structure: must have both Investment by owner ($1,000,000) and Bank loan.
Set up an effective Internal Control System for the business using 5 different internal control elements.
In: Accounting
Activity-Based Costing for a Service Company Crosswinds Hospital plans to use activity-based costing to assign hospital indirect costs to the care of patients. The hospital has identified the following activities and activity rates for the hospital indirect costs: Activity Activity Rate Room and meals $237 per day Radiology $334 per image Pharmacy $53 per physician order Chemistry lab $90 per test Operating room $740 per operating room hour The activity usage information associated with the two patients is as follows: Abel Putin Cheryl Umit Number of days 3 days 11 days Number of images 4 images 5 images Number of physician orders 6 orders 8 orders Number of tests 3 tests 6 tests Number of operating room hours 4 hours 7 hours a. Determine the activity cost associated with each patient.
In: Accounting
Single Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cost Distortion Pineapple Motor Company manufactures two types of specialty electric motors, a commercial motor and a residential motor, through two production departments, Assembly and Testing. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering using the multiple production department factory overhead rate method. The following factory overhead was budgeted for Pineapple: Assembly Department $220,000 Testing Department 809,600 Total $1,029,600 Direct machine hours were estimated as follows: Assembly Department 4,400 hours Testing Department 8,800 Total 13,200 hours In addition, the direct machine hours (dmh) used to produce a unit of each product in each department were determined from engineering records, as follows: Commercial Residential Assembly Department 0.50 dmh 1.00 dmh Testing Department 1.00 2.00 Total machine hours per unit 1.50 dmh 3.00 dmh a. Determine the per-unit factory overhead allocated to the Commercial and Residential motors under the single plantwide factory overhead rate method, using direct machine hours as the allocation base. Commercial Motor $ per unit Residential Motor $ per unit b. Determine the per-unit factory overhead allocated to the Commercial and Residential motors under the multiple production department factory overhead rate method, using direct machine hours as the allocation base for each department. Commercial Motor $ per unit Residential Motor $ per unit
In: Accounting
You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various retail outlets located in shopping malls across the country. In the past, the company has done very little in the way of budgeting and at certain times of the year has experienced a shortage of cash. Since you are well trained in budgeting, you have decided to prepare a master budget for the upcoming second quarter. To this end, you have worked with accounting and other areas to gather the information assembled below.
The company sells many styles of earrings, but all are sold for the same price—$16 per pair. Actual sales of earrings for the last three months and budgeted sales for the next six months follow (in pairs of earrings):
| January (actual) | 23,400 | June (budget) | 53,400 |
| February (actual) | 29,400 | July (budget) | 33,400 |
| March (actual) | 43,400 | August (budget) | 31,400 |
| April (budget) | 68,400 | September (budget) | 28,400 |
| May (budget) | 103,400 | ||
The concentration of sales before and during May is due to Mother’s Day. Sufficient inventory should be on hand at the end of each month to supply 40% of the earrings sold in the following month.
Suppliers are paid $5.70 for a pair of earrings. One-half of a month’s purchases is paid for in the month of purchase; the other half is paid for in the following month. All sales are on credit. Only 20% of a month’s sales are collected in the month of sale. An additional 70% is collected in the following month, and the remaining 10% is collected in the second month following sale. Bad debts have been negligible.
Monthly operating expenses for the company are given below:
| Variable: | |||
| Sales commissions | 4 | % of sales | |
| Fixed: | |||
| Advertising | $ | 370,000 | |
| Rent | $ | 35,000 | |
| Salaries | $ | 140,000 | |
| Utilities | $ | 15,500 | |
| Insurance | $ | 4,700 | |
| Depreciation | $ | 31,000 | |
Insurance is paid on an annual basis, in November of each year.
The company plans to purchase $24,500 in new equipment during May and $57,000 in new equipment during June; both purchases will be for cash. The company declares dividends of $27,750 each quarter, payable in the first month of the following quarter.
The company’s balance sheet as of March 31 is given below:
| Assets | ||
| Cash | $ | 91,000 |
| Accounts receivable ($47,040 February sales; $555,520 March sales) | 602,560 | |
| Inventory | 155,952 | |
| Prepaid insurance | 29,500 | |
| Property and equipment (net) | 1,120,000 | |
| Total assets | $ | 1,999,012 |
| Liabilities and Stockholders’ Equity | ||
| Accounts payable | $ | 117,000 |
| Dividends payable | 27,750 | |
| Common stock | 1,140,000 | |
| Retained earnings | 714,262 | |
| Total liabilities and stockholders’ equity | $ | 1,999,012 |
The company maintains a minimum cash balance of $67,000. All borrowing is done at the beginning of a month; any repayments are made at the end of a month.
The company has an agreement with a bank that allows the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. At the end of the quarter, the company would pay the bank all of the accumulated interest on the loan and as much of the loan as possible (in increments of $1,000), while still retaining at least $67,000 in cash.
Required:
Prepare a master budget for the three-month period ending June 30. Include the following detailed schedules:
1. a. A sales budget, by month and in total.
b. A schedule of expected cash collections, by month and in total.
c. A merchandise purchases budget in units and in dollars. Show the budget by month and in total.
d. A schedule of expected cash disbursements for merchandise purchases, by month and in total.
2. A cash budget. Show the budget by month and in total. Determine any borrowing that would be needed to maintain the minimum cash balance of $67,000.
3. A budgeted income statement for the three-month period ending June 30. Use the contribution approach.
4. A budgeted balance sheet as of June 30.
In: Accounting
Part 1: Record the following transactions for Classic Canine
Cuts for the month of December in the General Journal.
Transaction Date Description
1 12/1 Issued 100,000 shares of common stock for $100,000.
2 12/2
A retail space is rented. Paid for one year of rent in advance
totaling $24,000. (rent is $2,000 per month)
3 12/4 Purchased equipment for the business totaling $36,000.
4 12/5 Purchased $1,500 of supplies on account.
5 12/7 Provided services to customers for cash totaling
$5,000.
6 12/9
Purchased an ad in the local newspaper to run during December for
$400.
7 12/12
Customers purchased $1,000 of gift certificates for services to be
provided in the future (pre-paid for future services).
8 12/15
Paid employee salaries for the first half of December totaling
$1,200.
9 12/17 Paid $1,000 for the supplies that were purchased on
December 5th.
10 12/20 Provided $2,500 of services to customers on account.
11 12/25 Paid a cash dividend of $800 to the shareholders.
12 12/30 Received $1,500 on account for services provided on
12/20.
Part 2: Post all of the transactions for the month of December from
the General Journal to the General Ledger.
Part 3: Complete a Trial Balance as of December 31, 2019.
Page 3
Part 4: Record the adjusting entries for Classic Canine Cuts for
the month of December in the General Journal.
Transaction Date Description
Adj. 1 12/31
One month of rent that was prepaid has been used for the month of
December.
Adj. 2 12/31
The equipment purchased for $36,000 has a useful life of 5 years
and no salvage value. (Monthly depreciation is $600.)
Adj. 3 12/31 At the end of December, $1,000 of supplies remain on
hand.
Adj. 4 12/31
By the end of December $700 worth of the gift certificates had been
redeemed by customers (revenue earned) for grooming services and
had not been recorded.
Adj. 5 12/31
Salaries for the second half of December are $1,400, but they will
not be paid until January 3rd.
Part 5: Post all of the adjusting entries for the month of December
from the General Journal to the General Ledger.
Part 6: Complete an Adjusted Trial Balance as of December 31,
2019.
* Remember a balance in an account on the trial balance will carry
over to the adjusted trial balance if it was not changed by an
adjusting journal entry.*
Part 7: Complete an Income Statement for the month ended December
31, 2019.
Part 8: Complete a Statement of Retained Earnings for the month
ended December 31, 2019.
Part 9: Prepare a Balance Sheet as of December 31, 2019.
Part 10. Record the closing entries for the year ending December
31, 2019.
Part 11. Post all of the year end closing entries from the General
Journal to the General Ledger.
Part 12. Prepare a Post-Closing Trial Balance.
Page 4
General Journal Part 1
Ref # Date Account Debit Credit
1
2
3
4
5
6
7
8
9
Page 5
General Journal Part 1 (Continued)
Ref # Date Account Debit Credit
10
11
12
General Journal – Adjusting Entries Part 4
Ref # Date Account Debit Credit
A 1
A 2
A 3
A. 4
A. 5
Page 6
General Ledger Parts 2,5,11 TB = Trial Balance Total ATB = Adjusted
Trial Balance Total CB= Closing Balance Total Post Journal
references in left column for debits and right column for credits
in each account. Assets
Ref # Cash Ref # Debit Credit TB
Ref # #
Accounts Receivable Ref # Debit Credit TB
Ref # Supplies Ref # Debit Credit TB ATB
Ref # Prepaid Rent Ref # Debit Credit TB ATB
Ref # Equipment Ref # Debit Credit TB
Ref # Accumulated Depreciation Ref # Debit Credit ATB
Page 7
Liabilities
Ref # Accounts Payable Ref # Debit Credit TB
Ref # Salaries Payable Ref # Debit Credit ATB
Ref # Unearned (Deferred) Revenue Ref # Debit Credit TB ATB
Page 8
Stockholders’ Equity
Ref # Common Stock Ref # Debit Credit TB
Ref # Dividends Ref # Debit Credit TB CB
Ref # Retained Earnings Ref # Debit Credit CB
Page 9
Revenue
Ref # Service Revenue Ref # Debit Credit TB ATB CB
Expenses
Ref # Advertising Expense Ref # Debit Credit TB CB
Page 10
Ref # Salaries Expense Ref # Debit Credit TB ATB CB
Ref # Depreciation Expense Ref # Debit Credit ATB CB
Ref # Rent Expense Ref # Debit Credit ATB CB
Ref # Supplies Expense Ref # Debit Credit ATB CB
Page 11
Part 3
Classic Canine Cuts Trial Balance December 31, 2019
Account Debit Credit
$ $
Total $ $
Page 12
Part 6
Classic Canine Cuts Adjusted Trial Balance December 31, 2019
Account Debit Credit
$ $
Total $ $
Page 13
Part 7
Classic Canine Cuts Income Statement For the Month Ended December
31, 2019
Revenue
$
Expenses
$
Total Expenses
$
Net Income
$
Part 8
Classic Canine Cuts Statement of Retained Earning December 31,
2019
Retained Earnings
Beginning Balance, December 1, 2019 $
Ending Balance, December 31, 2019
$
Page 14
Part 9
Classic Canine Cuts Balance Sheet December 31, 2019
Assets
Liabilities
Total Current Liabilities
Total Current Assets
Property Plant and Equipment
Total Liabilities
Stockholders’ Equity
Total Property Plant and Equipment
Total Stockholders’ Equity
Total Assets
Total Liabilities and Stockholders’ Equity
Page 15
General Journal – Closing Entries Part 10 Revenue, Expense and
Dividend accounts.
Ref # Date Account Debit Credit
C.1
C.2
C.3
Page 16
Part 12
Classic Canine Cuts Post-Closing Trial Balance December 31,
2019
Account Debit Credit
$ $
Total $ $
In: Accounting
Conestoga Corporation operates manufacturing facilities in State P and State Q. In addition, the corporation owns nonbusiness rental property in State Q. Conestoga incurred the following compensation expenses:
|
Sixty percent of the time is spent by the administrative staff located in State Q and 30% of the time spent by officers located in State Q are devoted to the operation, maintenance, and supervision of the rental property. Both states exclude such rent income from the definition of apportionable income.
Round your answers to four decimal places before converting to a percentage. If required, round your final answers to two decimal places.
Conestoga's payroll factor for State P is % and for State Q is %.
In: Accounting
eBook
Show Me How
Calculator
Print Item
Determine the amount of sales (units) that would be necessary under
Break-Even Sales Under Present and Proposed Conditions
Darby Company, operating at full capacity, sold 91,800 units at a price of $129 per unit during the current year. Its income statement for the current year is as follows:
| Sales | $11,842,200 | ||
| Cost of goods sold | 5,848,000 | ||
| Gross profit | $5,994,200 | ||
| Expenses: | |||
| Selling expenses | $2,924,000 | ||
| Administrative expenses | 2,924,000 | ||
| Total expenses | 5,848,000 | ||
| Income from operations | $146,200 |
The division of costs between fixed and variable is as follows:
| Variable | Fixed | |||
| Cost of goods sold | 70% | 30% | ||
| Selling expenses | 75% | 25% | ||
| Administrative expenses | 50% | 50% | ||
Management is considering a plant expansion program that will permit an increase of $903,000 in yearly sales. The expansion will increase fixed costs by $90,300, but will not affect the relationship between sales and variable costs.
Required:
1. Determine the total variable costs and the total fixed costs for the current year. Enter the final answers rounded to the nearest dollar.
| Total variable costs | $ |
| Total fixed costs | $ |
2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Enter the final answers rounded to two decimal places.
| Unit variable cost | $ |
| Unit contribution margin | $ |
3. Compute the break-even sales (units) for the
current year. Enter the final answers rounded to the nearest whole
number.
units
4. Compute the break-even sales (units) under
the proposed program for the following year. Enter the final
answers rounded to the nearest whole number.
units
5. Determine the amount of sales (units) that
would be necessary under the proposed program to realize the
$146,200 of income from operations that was earned in the current
year. Enter the final answers rounded to the nearest whole
number.
units
6. Determine the maximum income from operations
possible with the expanded plant. Enter the final answer rounded to
the nearest dollar.
$
7. If the proposal is accepted and sales remain
at the current level, what will the income or loss from operations
be for the following year? Enter the final answer rounded to the
nearest dollar.
$ Income
8. Based on the data given, would you recommend accepting the proposal?
Choose the correct answer
I ONLY NEED THE ANSWER TO #6
In: Accounting