Selected information from the Blake Corporation accounting records for June follows:
| Materials Inventory | ||||
| BB (6/1) | 95,000 | |||
| 467,000 | 422,000 | |||
| Work-In-Process Inventory | ||||
| Labor | 400,000 | |||
| EB(6/30) | 600,000 | |||
| Finished Goods Inventory | ||||
| BB (6/1) | 297,000 | |||
| 842,000 | 839,000 | |||
| Cost of Goods Sold | ||||
| 30,000 | ||||
| Manufacturing Overhead Control | ||||
| 370,000 | ||||
| 370,000 | ||||
| Applied Manufacturing Overhead | ||||
| 400,000 | ||||
| 370,000 | ||||
| 30,000 | ||||
Additional information for June follows:
Required:
a. What was the cost of direct materials purchased in June?
b. What was the over- or underapplied manufacturing overhead for June?
c. What was the manufacturing overhead application rate in June?
d. What was the cost of products completed during June?
e. What was the balance of the Work-in-Process Inventory account at the beginning of June?
f. What was the operating profit (or loss) for June? (Negative amounts should be indicated by a minus sign.)
In: Accounting
Forest Components makes aircraft parts. The following transactions occurred in July: Purchased $16,950 of materials on account. Issued $16,860 in direct materials to the production department. Issued $1,350 of supplies from the materials inventory. Paid for the materials purchased in transaction (1) using cash. Returned $2,010 of the materials issued to production in (2) to the materials inventory. Direct labor employees earned $31,000, which was paid in cash. Paid $17,270 for miscellaneous items for the manufacturing plant. Accounts Payable was credited. Recognized depreciation on manufacturing plant of $36,900. Applied manufacturing overhead for the month. Forest uses normal costing. It applies overhead on the basis of direct labor costs using an annual, predetermined rate. At the beginning of the year, management estimated that direct labor costs for the year would be $434,900. Estimated overhead for the year was $391,410. The following balances appeared in the inventory accounts of Forest Components for July: Beginning Ending Materials Inventory ? $ 12,510 Work-in-Process Inventory ? 10,660 Finished Goods Inventory $ 2,700 7,070 Cost of Goods Sold ? 74,400 Required: a. Prepare journal entries to record these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) b. Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold.
In: Accounting
SAS Computers owns a patent on a computer processor. The processor was developed and capitalized at a cost of €2,100,000 in the beginning of 2015. It was expected to be economically useful for 7 years and have no residual value. At the beginning of 2018, a new processor was developed, making the old processor worth €900,000 (independent appraiser) with €200,000 total cost to sell. The present value of the processor’s future cash flows, given the development of the newer processor, is estimated to be €870,000. At this point, it is expected to have a useful life of 4 years with no residual value. Is the processor impaired in 2018? If it is impaired, prepare the to record the loss. Also prepare the journal entry for amortization in 2018. Show your work.
In: Accounting
Marcelino Co.'s March 31 inventory of raw materials is $81,000.
Raw materials purchases in April are $590,000, and factory payroll
cost in April is $386,000. Overhead costs incurred in April are:
indirect materials, $57,000; indirect labor, $26,000; factory rent,
$40,000; factory utilities, $20,000; and factory equipment
depreciation, $58,000. The predetermined overhead rate is 50% of
direct labor cost. Job 306 is sold for $645,000 cash in April.
Costs of the three jobs worked on in April follow.
| Job 306 | Job 307 | Job 308 | ||||||||||
| Balances on March 31 | ||||||||||||
| Direct materials | $ | 28,000 | $ | 39,000 | ||||||||
| Direct labor | 25,000 | 17,000 | ||||||||||
| Applied overhead | 12,500 | 8,500 | ||||||||||
| Costs during April | ||||||||||||
| Direct materials | 135,000 | 205,000 | $ | 115,000 | ||||||||
| Direct labor | 104,000 | 152,000 | 104,000 | |||||||||
| Applied overhead | ? | ? | ? | |||||||||
| Status on April 30 | Finished (sold) | Finished (unsold) | In process | |||||||||
MARCELINO COMPANYSchedule of Cost of Goods ManufacturedFor Month Ended April 30Total manufacturing costs0Total cost of work in process0Cost of goods manufactured$0 |
||||||||||||
In: Accounting
explain what "equivalent units" are and how this concept is useful when assigning cost to products manufactured in a process environment? Provide an example to illustrate your comments.
In: Accounting
A department uses the FIFO method of process costing. All direct materials are added at the beginning of the process. This department has the following data for this month.
What is the department's direct material cost per equivalent unit for this month (round final answer to nearest cent if necessary)?
In: Accounting
A department uses the FIFO method of process costing. All direct materials are added at the beginning of the process. This department has the following data for this month.
What is the department's total cost of ending WIP for this month (round final answer to nearest cent if necessary)?
In: Accounting
Perrin Co has 2 divisions, A and B. Division A has
limited skilled labour and is operating at full capacity making
product Y. It has been asked to supply a different product, X to
Division B. Division B currently sources this product externally
for $700 per unit. The same grade of materials and labour is used
in both products. The cost card is below :
Product Y.X
Selling price $600. -
materials ($50 per kg) - $200.$150
Labour ($20 per hr) - $80.$120
Fixed overhead ($15 per hr) - $60.$90
Using opportunity cost approach to transfer pricing, what is the minimum transfer price?
Please explain your answer with workings and the
reasoning behind it.
Thanks.
In: Accounting
Which form of stock is a better investment for shareholders -- common or preferred? State your reasons as if you were trying to inform someone which type of stock to invest in.
In: Accounting
(TCO B) The following information pertains to Fox Inc.’s portfolio of marketable securities for the Year ended Dec 31, Year 1 and Dec 31, Year 2.
| Cost | Fair Value at 12/31 Year 1 | Year 2 Activity: Purchases | Year 2 Activity: Sales | Fair Value at 12/31 Year 2 | |
| Trading Securities | |||||
| Smith Co. | $230,000 | $240,000 | $235,000 | ||
| Jones Co | $290,000 | $275,000 | $285,000 | ||
| Available for Sale Securities | |||||
| Williams's Co. | $270,000 | $245,000 | $255,000 | N/A | |
| Gores Co. | $250,000 | $235,000 | $265,000 | ||
| Held to Maturity Securities | |||||
| Martin Co. | 1,400,00 | $1,250,000 |
Note 1: Fox Inc. uses US GAAP
Note 2: Fox Inc. uses valuation accounts to record changes in the
fair value of its marketable securities
Note 3: The Martin Co. security was purchase at par value
Note 4: The decline in the value of Martin Co. is considered to be
other than temporary
Requirement:
Record the journal entries for the following marketable securities
transactions based on the information given in the table.
In: Accounting
Six Measures of Solvency or Profitability.
The following data were taken from the financial statements of Gates Inc. for the current fiscal year.
| Property, plant, and equipment (net) | $1,238,900 | |||||
| Liabilities: | ||||||
| Current liabilities | $190,000 | |||||
| Note payable, 6%, due in 15 years | 953,000 | |||||
| Total liabilities | $1,143,000 | |||||
| Stockholders' equity: | ||||||
| Preferred $4 stock, $100 par (no change during year) | $1,143,000 | |||||
| Common stock, $10 par (no change during year) | 1,143,000 | |||||
| Retained earnings: | ||||||
| Balance, beginning of year | $1,220,000 | |||||
| Net income | 479,000 | $1,699,000 | ||||
| Preferred dividends | $45,720 | |||||
| Common dividends | 129,280 | 175,000 | ||||
| Balance, end of year | 1,524,000 | |||||
| Total stockholders' equity | $3,810,000 | |||||
| Sales | $23,179,200 | |||||
| Interest expense | $57,180 | |||||
Assuming that total assets were $4,705,000 at the beginning of the current fiscal year, determine the following. When required, round to one decimal place.
| a.Ratio of fixed assets to long-term liabilities | |
| b. Ratio of liabilities to stockholders' equity | |
| c. Asset turnover | |
| d. Return on total assets | % |
| e. Return on stockholders’ equity | % |
| f. Return on common stockholders' equity | % |
In: Accounting
Four years ago, Travis, a single taxpayer, acquired stock in a corporation that qualified as a small business corporation under § 1244, at a cost of $60,000. Travis wants to give his son, Jaden, $20,000 to help finance Jaden’s college education. The stock is currently worth $20,000. Travis is considering selling the stock in the current year for $20,000 and giving the cash to Jaden. As an alternative, Travis could give the stock to Jaden and let Jaden sell it for $20,000. Which alternative should Travis choose?
In: Accounting
What is an Estimated Returns Inventory
An example of a Closing journal entry for sales revenue and sales discounts forfeited.
An example of Journal entry to record cost of merchandise sold under perpetual inventory system.
what is the Lower-of-cost-or-market (LCM) rule
Description of a good merchandise inventory control system.
Formula to calculate weighted-average unit cost for merchandise inventory.
In: Accounting
Liberty Inc. acquired 100% of the voting common stock of Valance Inc. on January 1, 2018 by issuing 4,000 shares of Liberty Inc. $40 par value common stock that had a fair value of $120 per share. Valance Inc. will dissolve after the acquisition. Liberty incurred $40,000 of legal and accounting fees; and paid $25,000 in stock issuance costs as a result of this acquisition. The book value and fair value of Valance’s accounts on that date (prior to creating the combination) along with the book value of Pace's accounts are shown below:
|
Liberty |
Valance |
Valance |
|
|
Book |
Book |
Fair |
|
|
Value |
Value |
Value |
|
|
Retained earnings, 1/1/18 |
$(250,000) |
$(240,000) |
|
|
Cash Receivables |
100,000 70,000 |
20,000 50,000 |
$20,000 50,000 |
|
Inventory |
230,000 |
170,000 |
210,000 |
|
Land |
280,000 |
220,000 |
240,000 |
|
Buildings (net) |
480,000 |
240,000 |
270,000 |
|
Equipment (net) |
120,000 |
90,000 |
90,000 |
|
Liabilities |
(650,000) |
(430,000) |
(420,000) |
|
Common stock |
(360,000) |
(80,000) |
|
|
Additional paid-in capital |
(20,000) |
(40,000) |
|
In: Accounting
Exercise 5-13 (Video)
Billings Company has the following information available for
September 2020.
Unit selling price of video game consoles$400
Unit variable costs$280
Total fixed costs$54,000
Units sold600
Compute the unit contribution margin.
Unit contribution margin
Prepare a CVP income statement that shows both total and per
unit amounts.
BILLINGS COMPANY
CVP Income Statement
For the Month Ended September 30, 2020
Total
Per Unit
Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs
$
$
Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs
Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs
$
Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs
Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs
$
Compute Billings’ break-even point in units.
Break-even point in units units
Prepare a CVP income statement for the break-even point that
shows both total and per unit amounts.
BILLINGS COMPANY
CVP Income Statement
For the Month Ended September 30, 2020
Total
Per Unit
Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs
$
$
Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs
Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs
$
Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs
Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs
$
In: Accounting