Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter:

1. As of December 31 (the end of the prior quarter), the company’s general ledger showed the following account balances:

2. Actual sales for December and budgeted sales for the next four months are as follows:

3. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales.

4. The company’s gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.)

5. Monthly expenses are budgeted as follows: salaries and wages, $27,000 per month: advertising, $70,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $42,000 for the quarter.

6. Each month’s ending inventory should equal 25% of the following month’s cost of goods sold.

7. One-half of a month’s inventory purchases is paid for in the month of purchase; the other half is paid in the following month.

8. During February, the company will purchase a new copy machine for $1,700 cash. During March, other equipment will be purchased for cash at a cost of $84,500.

9. During January, the company will declare and pay $45,000 in cash dividends.

10. Management wants to maintain a minimum cash balance of $30,000. The company has an agreement with a local 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. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.

Required:

Using the data above, complete the following statements and schedules for the first quarter:

1. Schedule of expected cash collections:

2-a. Merchandise purchases budget:

2-b. Schedule of expected cash disbursements for merchandise purchases:

3. Cash budget:

4. Prepare an absorption costing income statement for the quarter ending March 31.

5. Prepare a balance sheet as of March 31.

Please answer both question as a discussion board

The sales budget is considered the primary driver of all other budgets including budget balance sheet and cash budget.

1. Explain why it is critical the sales budget is the first budget prepared in the master budget.

2. Describe how changes in the sales budget can ripple through the operating budgets and impact the cash budget and budgeted balance sheet.

Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter:

1. As of December 31 (the end of the prior quarter), the company’s general ledger showed the following account balances:

2. Actual sales for December and budgeted sales for the next four months are as follows:

3. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales.

4. The company’s gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.)

5. Monthly expenses are budgeted as follows: salaries and wages, $21,000 per month: advertising, $61,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $43,060 for the quarter.

6. Each month’s ending inventory should equal 25% of the following month’s cost of goods sold.

7. One-half of a month’s inventory purchases is paid for in the month of purchase; the other half is paid in the following month.

8. During February, the company will purchase a new copy machine for $1,600 cash. During March, other equipment will be purchased for cash at a cost of $73,000.

9. During January, the company will declare and pay $45,000 in cash dividends.

10. Management wants to maintain a minimum cash balance of $30,000. The company has an agreement with a local 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. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.

Required:

Using the data above, complete the following statements and schedules for the first quarter:

1. Schedule of expected cash collections:

2-a. Merchandise purchases budget:

2-b. Schedule of expected cash disbursements for merchandise purchases:

3. Cash budget:

4. Prepare an absorption costing income statement for the quarter ending March 31.

5. Prepare a balance sheet as of March 31.

A20-14 Basic and Diluted EPS

The following information relates to Willowdale Ltd.’s financial statements for the year ended 31 December 20X6:

a. On 1 January 20X6, Willowdale’s capital structure consisted of the following:

b. On 30 September 20X6, Willowdale issued an additional 100,000 common shares for $1.5 million cash.
c. Willowdale reported earnings of $1.5 million for the year ended 31 December 20X6 net of tax of 25%.

Required:
Calculate the basic and diluted earnings per share figures for 20X6

The following data relates to Merrick Ltd., a single product company who manufactures vaccines:

Variances for October:

DIRECT MATERIAL QUANTITY VARIANCE 2400 UNFAVORABLE

MATERIALS VARIANCE (TOTAL) 600 FAVORABLE

DIRECT LABOR EFFICIENCY VARIANCE 9000 FAVORABLE

Actual materials and labor costs for October:

Materials and labor standards to manufacture one unit of vaccine:

Merrick Ltd. manufactured and sold 1,400 units of vaccines during October. There were no materials and finished goods inventories at the start and end of the October.

Required:

1. Compute standard price per pound of materials.
2. Compute standard quantity of materials allowed for actual production.
3. Compute standard quantity of direct materials allowed for one unit of product.
4. Compute actual direct labor cost per hour for October.
5. Compute direct labor rate variance and indicate whether it is favorable or unfavorable.

2.

A Plus Company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table:

Which of the following statements is true regarding this company's activity rates?

Multiple Choice

• The activity rate under the activity-based costing system for Activity 2 is $2.81.

• The activity rate under the activity-based costing system for Activity 2 is $16.00.

• The activity rate under the activity-based costing system for Activity 2 is $19.50.

• The activity rate under the activity-based costing system for Activity 2 is $1.50.

• The activity rate under the activity-based costing system for Activity 2 is $2.00.

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 98,550 units at a price of $117 per unit during the current year. Its income statement for the current year is as follows:

The division of costs between fixed and variable is as follows:

Management is considering a plant expansion program that will permit an increase of $936,000 in yearly sales. The expansion will increase fixed costs by $93,600, but will not affect the relationship between sales and variable costs.

Required:

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 $142,350 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?

1. In favor of the proposal because of the reduction in break-even point.
2. In favor of the proposal because of the possibility of increasing income from operations.
3. In favor of the proposal because of the increase in break-even point.
4. Reject the proposal because if future sales remain at the current level, the income from operations will increase.
5. Reject the proposal because the sales necessary to maintain the current income from operations would be below the current year sales.

Choose the correct answer.
b

Please explain how you get each answer

Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below:

Exercise 8-12

Beech’s managers have made the following additional assumptions and estimates:

1. Estimated sales for July, August, September, and October will be $350,000, $370,000, $360,000, and $380,000, respectively.

2. All sales are on credit and all credit sales are collected. Each month’s credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at June 30 will be collected in July.

3. Each month’s ending inventory must equal 30% of the cost of next month’s sales. The cost of goods sold is 70% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July.

4. Monthly selling and administrative expenses are always $46,000. Each month $7,000 of this total amount is depreciation expense and the remaining $39,000 relates to expenses that are paid in the month they are incurred.

5. The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30.

Required:

1. Prepare a schedule of expected cash collections for July, August, and September.

2-a. Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30.

2-b. Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September.

3. Prepare an income statement that computes net operating income for the quarter ended September 30.

4. Prepare a balance sheet as of September 30.

What can we say about the limitations involved in the assessment of ROE for analyzing the profitability of a company?Please give an understandable explanation

1. What is Kaizen and how is it related with lean maufacturing?

          2. What are the Kaizen practices that MARS had implemented in their plant and what are their results? Give as

              many as possible as mentioned the article. Explain further your answers.

          3. One of the Kaizen practices at Mars is people empowerment. It is mentioned in the article that every associate

              has the authority to stop the line if they see a serious safety or quality issue. In your own opinion, what does

              this mean? Explain your answer, you can cite examples if needed.

An explanation of one area of enterprise risk management (4-5) sentences.

1.) When is it appropriate to use the income approach?

2.) What are the pros and cons of using the income approach?

3.) Describe what pre-tax and after-tax information is.

4.) What is the capitalization of benefits method?

5.) What is the discounted future benefits method?

6.) What is the excess earnings method?

Prepare all the necessary journal entries for the transactions listed above for Parker Corporation.

5. On December 1, 2018, Folks Wagon Company adopted a stock-option plan that granted options

to key executives to purchase 50,000 shares of the company’s $10 par value common stock. The

options were granted on January 1, 2019, and were exercisable 3 years after the date of grant if the

grantee was still an employee of the company. The options expired 5 years from the date of grant.

The option price was set at $35, and the fair value option-pricing model determines the total

compensation expense to be $450,000.

All of the options were exercised during the year 2022: 20,000 on February 23 when the market

price was $46, and 30,000 on August 8 when the market price was $85 a share.

a. Prepare the journal entries relating to the stock option plan for the years 2019, 2020, and 2021.

Assume that the employee performs services equally in 2019, 2020, and 2021.

b. Prepare the journal entries that record the two events of exercising the options in 2022

Consider the case of Mike. He is just about to turn 62 years of age and he has come to you to

help him determine if/when he can retire. Mike has provided you with the following

information:

His current earnings are $100,000 annually

He used a “Top Down” retirement assessment and determined that his retirement cash needs

would be equal to his annual earnings less his FICA tax, his mortgage of $1320/month, and

$5,000 per year of business/work related expense.

He does estimate that each year he waits to retire, his cash flow needs will increase by 2%.

Once he is retired, he should experience stable cash flows.

He currently has $425,000 in his retirement account.

He believes he should be able to earn a 6% rate of return on his retirement account.

His Social Security statement indicates he should receive a payment of $2,685 per month at his

full retirement age (FRA) of 67. He is aware that his social security payments are reduced if he

starts taking payments early, and they will increase if he defers taking social security payments

after age 67.

Mike expects to live until age 95.

He is interested in using an annuity method of capital needs analysis.

Considering this fact pattern, Mike wants to know the following:

1.

Can he afford to retire now, at age 62, based on his current retirement account value,

reduced social security and cash flow needs?

2.

Can he afford to retire at his FRA of 67? If he is short of capital, how much would he

have to save each year to meet his goal?

3.

Can he afford to retire if he waits until age 70? If so, how much cash flow could he have

if he used a Capital Preservation strategy and assumed his 6% rate of return is

sustainable

14. Emily, who lives in Indiana, volunteered to travel to Louisiana in March to work on a home-building project for
Habitat for Humanity (a qualified charitable organization). She was in Louisiana for three weeks. She normally
makes $500 per week as a carpenter’s assistant and plans to deduct $1,500 as a charitable contribution. In addition,
she incurred the following costs in connection with the trip: $600 for transportation, $1,200 for lodging, and $400 for
meals. What is Emily’s deduction associated with this charitable activity?

In 2018, Joanne invested $90,000 for a 20% interest in a limited liability company (LLC) in which she is a material
participant. The LLC reported losses of $340,000 in 2018 and $180,000 in 2019. Joanne’s share of the LLC’s losses
was $68,000 in 2018 and $36,000 in 2019. How much of these losses can Joanne deduct?

Rex and Dena are married and have two children, Michelle (age 7) and Nancy (age 5). During 2018, Rex earned a
salary of $24,500, received interest income of $300, and filed a joint income tax return with Dena. Dena had $0 gross
income. Their earned income credit for the year is: