Explain the key techniques you can use to analyze financial statements. What starting information is required, what steps are performed, what are the results, and how are they used in decision-making?

Problem 23-2A (Part Level Submission) Ayala Corporation accumulates the following data relative to jobs started and finished during the month of June 2017. Costs and Production Data Actual Standard Raw materials unit cost $2.30 $2.20 Raw materials units used 11,100 10,400 Direct labor payroll $174,640 $171,360 Direct labor hours worked 14,800 15,300 Manufacturing overhead incurred $214,678 Manufacturing overhead applied $218,178 Machine hours expected to be used at normal capacity 43,500 Budgeted fixed overhead for June $65,250 Variable overhead rate per machine hour $3.10 Fixed overhead rate per machine hour $1.50 Overhead is applied on the basis of standard machine hours. 3.10 hours of machine time are required for each direct labor hour. The jobs were sold for $476,000. Selling and administrative expenses were $40,000. Assume that the amount of raw materials purchased equaled the amount used. (a) Compute all of the variances for (1) direct materials and (2) direct labor. (Round answers to 0 decimal places, e.g. 125.) (1) Total materials variance $ Materials price variance $ Materials quantity variance $ (2) Total labor variance $ Labor price variance $ Labor quantity variance $

Seattle Coffee Limited's bank statement for the month of November 30, 2020 showed a balance per bank of $7,000. The company's general ledger Cash account showed a balance of $5,904 at November 30, 2020. Other information is as follows:

1. Cash receipts for November 30 recorded on the company's books were $5,200, but this amount does not appear on the bank statement.

2. The bank statement shows a Bank charge fee for $40 for cheque printing charges.

3. Cheque #119 payable in the amount of $248 to Holt Corporation was recorded in the general journal for $284 and cleared the bank for $248. The correct amount of Cheque #119 is $248. The bookkeeper made an error.

4. The total amount of cheques outstanding at November 30 was $5,800.

5. The bank statement shows and EFT for Utilities of $200.

6. The bank returned an NSF cheque from a customer for $560.

7. The bank statement included a deposit for $1,260, which represents the electronic collection of customer accounts which have not yet been recorded on the company’s books.

Instructions

(a) Prepare a bank reconciliation for Seattle Coffee Limited at November 30, 2020. (hint: use the template on Moodle to ensure correct formatting)

(b) Prepare any journal entries necessary as a result of the bank reconciliation.

The following selected account balances were taken from ABC Company's accounting records during 2018: January 1, 2018 December 31, 2018 Inventory 69,000 35,000 Accounts payable 47,000 41,000 Long-term notes payable 165,000 130,000 Income tax payable 11,000 7,000 Investments 89,000 68,000 Accounts receivable 77,000 84,000 Land 60,000 89,000 Common stock 100,000 175,000 Retained earnings 26,000 41,000 The following information was taken from ABC Company's 2018 income statement: Sales revenue $422,000 Cost of goods sold 361,000 Gain on sale of investments 11,000 Income tax expense 22,000 Net income $ 50,000 Calculate the net cash flow from financing activities for 2018. If your answer is negative, place a minus sign in front of your answer (e.g., -1234).

On January 1, 2018, XYZ Company paid $380,000 to purchase land, building, and equipment. The market values of these assets on that date were: land $60,000; building $200,000; equipment $140,000. Before the property could be used, XYZ Company had to spend $5,000 to put the equipment in working order. The building was assigned a useful life of 20 years with a $4,000 salvage value. The building will be depreciated using the straight-line method. On October 1, 2028, XYZ Company sold the building for $73,000 cash. Calculate the amount of the loss recorded on the sale of the building.

Provide, in your own words, an overview of the four financial statements listed in the text: the Income Statement (also called the P&L), the Balance Sheet, the Statement of Cash Flows, and the Statement of Stockholder's Equity. What information is contained in each, and what judgments can you make about a company from each of the statements?

Weston Products manufactures an industrial cleaning compound that goes through three processing departments—Grinding, Mixing, and Cooking. All raw materials are introduced at the start of work in the Grinding Department. The Work in Process T-account for the Grinding Department for May is given below: Work in Process—Grinding Department Inventory, May 1 171,360 Completed and transferred to the Mixing Department ? Materials 405,020 Conversion 175,260 Inventory, May 31 ? The May 1 work in process inventory consisted of 102,000 pounds with $116,280 in materials cost and $55,080 in conversion cost. The May 1 work in process inventory was 100% complete with respect to materials and 30% complete with respect to conversion. During May, 299,000 pounds were started into production. The May 31 inventory consisted of 130,000 pounds that were 100% complete with respect to materials and 60% complete with respect to conversion. The company uses the weighted-average method in its process costing system. Required: 1. Compute the Grinding Department's equivalent units of production for materials and conversion in May. 2. Compute the Grinding Department's costs per equivalent unit for materials and conversion for May. 3. Compute the Grinding Department's cost of ending work in process inventory for materials, conversion, and in total for May. 4. Compute the Grinding Department's cost of units transferred out to the Mixing Department for materials, conversion, and in total for May.

Meir, Benson, and Lau are partners and share income and loss in a 1:4:5 ratio (in percents: Meir, 10%; Benson, 40%; and Lau, 50%). The partnership's capital balances are as follows: Meir, $38,000; Benson, $159,000; and Lau, $203,000. Benson decides to withdraw from the partnership.

2. Assume that Benson does not retire from the partnership described in Part 1. Instead, Rhode is admitted to the partnership on February 1 with a 25% equity. Prepare journal entries to record Rhode’s entry into the partnership under each separate assumption: Rhode invests (a) $133,333; (b) $97,333; and (c) $174,666. .

Record the admission of Rhode with an investment of $97,333 for a 25% interest in the equity.

Record the admission of Rhode with an investment of $174,666 for a 25% interest in the equity.

A U.S. company, G. Marx Co., purchases and receives video games from a Japanese company, Saki Corporation, on October 20, Year 7. The transaction is denominated in yen and calls for Marx to pay Saki 2 million yen on January 15, Year 8. The spot rate for yen is $.01015 at the time of the transaction. The spot rate is $.01005 on October 31, Year 7, Marx's fiscal year end, and $.01030 on January 15, Year 8.

G. Marx Co. has two wholly owned subsidiaries, H. Marx of Canada and C. Marx of France. Functional currencies are the Canadian dollar for H. Marx and the euro for C. Marx. However, C. Marx keeps its books in a currency that is not the functional currency or the reporting currency.

G. Marx also recently disposed of a long-term investment in Z. Marx of Mexico, a consolidated entity whose functional currency was the peso.

Enter the appropriate amounts for the following journal entries recorded by Marx Corporation for its transaction with Saki Corporation.

To prepare each required journal entry:

• Enter the corresponding debit or credit amount in the associated column.
• Round all amounts to the nearest whole number.
• Not all rows in the table might be needed to complete each journal entry.
• If no journal entry is needed, check the “No entry required” box at the top of the table as your respons

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he cash account for Coastal Bike Co. at October 1, 20Y9, indicated a balance of $32,788. During October, the total cash deposited was $139,699, and checks written totaled $138,679. The bank statement indicated a balance of $42,830 on October 31, 20Y9. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:

The 2018 Annual Reports/Financial Statements for both Air NZ and Auckland Airportare both available in the links below. Answer the questions for both Air NZ and Auckland Airport. All questions only relate to 2018.

Air NZ : https://p-airnz.com/cms/assets/PDFs/Air-NZ-2018-Financial-Results.pdf

AKL airport : https://corporate.aucklandairport.co.nz/-/media/Files/Corporate/Annual-Report-2018/Annual-Report-2018-Financial-Statements.ashx?la=en&hash=3FD590BBFBB78389CD2DEA7EE8402BCAEC4332E9

Carbex, Inc., produces cutlery sets out of high-quality wood and steel. The company makes a Standard set and a Deluxe set and sells them to retail department stores throughout the country. The Standard set sells for $88, and the Deluxe set sells for $103. The variable expenses associated with each set are given below.

The company’s fixed expenses each month are:

Mary Parsons, the financial vice president, watches sales commissions carefully and has noted that they have risen steadily over the last year. For this reason, she was shocked to find that even though sales have increased, profits for the current month—May—are down substantially from April. Sales, in sets, for the last two months are given below:

Required:

1-a. Prepare contribution format income statement for April.

1-b. Prepare contribution format income statement for May.

3-a. Compute the break-even point in dollar sales for April.

3-b. Would the break-even point in May be higher or lower than the break-even point in April?

Neptune Company produces toys and other items for use in beach and resort areas. A small, inflatable toy has come onto the market that the company is anxious to produce and sell. The new toy will sell for $3.10 per unit. Enough capacity exists in the company’s plant to produce 30,500 units of the toy each month. Variable expenses to manufacture and sell one unit would be $1.96, and fixed expenses associated with the toy would total $51,655 per month.

The company's Marketing Department predicts that demand for the new toy will exceed the 30,500 units that the company is able to produce. Additional manufacturing space can be rented from another company at a fixed expense of $2,583 per month. Variable expenses in the rented facility would total $2.17 per unit, due to somewhat less efficient operations than in the main plant.

Required:

1. What is the monthly break-even point for the new toy in unit sales and dollar sales.

2. How many units must be sold each month to attain a target profit of $12,090 per month?

3. If the sales manager receives a bonus of 15 cents for each unit sold in excess of the break-even point, how many units must be sold each month to attain a target profit that equals a 20% return on the monthly investment in fixed expenses?

(For all requirments, Round "per unit" to 2 decimal places, intermediate and final answers to the nearest whole number.)