11 Cash provided by operating activities Select one: a. may be larger than net income. b. summarizes cash flows relating to the purchase and sale of long-lived assets. c. equals the change in cash for the year d. decreases when long-term debt is repaid

Revise your worksheet to reflect these updated assumptions then answer the questions that follow.

You have been provided with the following Aging Report to use to adjust the Allowance for Uncollectible Accounts for a company at year end.

After reviewing the data, you note the 'not yet due' category is overstated by 20%, while the 'Over 90 days' category is understated by 20%, (this error also caused the AR balance on the schedule to not equal the amount of Accounts Receivable on the balance sheet).

Also, you note the balance in the Allowance account is actually a debit, rather than a credit. Being that the normal balance for this account is a credit, the accountant hadn't noticed the issue.

Required:
1. Use your spreadsheet to recalculate the needed adjustment and account balances. What will be the balance in Accounts Receivable and the Allowance for Uncollectible Accounts based on the above information?

2. Prepare the journal entry to adjust the Allowance for Uncollectible Accounts, using your corrected data. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

3. Which statement is true regarding the effect of the Allowance account being shown incorrectly as a credit rather than as a debit balance in the original account analysis?

• The error caused the journal entry to require a credit to Bad Debts Expense rather than a debit.

• Correcting the error increased the amount of Bad Debt Expense recorded for the period.

• Correcting the error decreased the amount of Bad Debt Expense recorded for the period.

• The Allowance account and the adjustment were not affected by the original misstatement, as it was only an estimate.

Dan loves game shows, He has been a guest on many game shows including Ellen. On the last game show, The Price Is Right, he was invited to participate. As a result, he won a new car valued at $48,000. He questions whether this prize is taxable or is it a non-taxable gift. He is concerned about the value of the car and the associated tax that he may have to pay. Dan emailed you, his tax accountant. He wants you to tell him if he is required to report the car as income, and if he is required to report it as income, how much would be reported?

Please answer this question fully & correctly and I will give you a 5 star review.

The DeVille Company reported pretax accounting income on its income statement as follows:

Included in the income of 2021 was an installment sale of property in the amount of $70,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $28,000 in 2022, $35,000 in 2023, and $7,000 in 2024.

Included in the 2023 income was $30,000 interest from investments in municipal governmental bonds.

The enacted tax rate for 2021 and 2022 was 40%, but during 2022, new tax legislation was passed reducing the tax rate to 25% for the years 2023 and beyond.

Required:
Prepare the year-end journal entries to record income taxes for the years 2021–2024. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

The Foundational 15 [LO8-2, LO8-3, LO8-4, LO8-5, LO8-7, LO8-9, LO8-10]

[The following information applies to the questions displayed below.]

Morganton Company makes one product and it provided the following information to help prepare the master budget:

a. The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and September are 8,700, 18,000, 20,000, and 21,000 units, respectively. All sales are on credit.

b. Forty percent of credit sales are collected in the month of the sale and 60% in the following month.

c. The ending finished goods inventory equals 30% of the following month’s unit sales.

d. The ending raw materials inventory equals 20% of the following month’s raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $2.00 per pound.

e. Forty percent of raw materials purchases are paid for in the month of purchase and 60% in the following month.

f. The direct labor wage rate is $15 per hour. Each unit of finished goods requires two direct labor-hours.

g. The variable selling and administrative expense per unit sold is $1.90. The fixed selling and administrative expense per month is $68,000.

1. If 101,500 pounds of raw materials are needed to meet production in August, what is the estimated cost of raw materials purchases for July?

2. In July what are the total estimated cash disbursements for raw materials purchases? Assume the cost of raw material purchases in June is $129,120.

3. What is the total estimated direct labor cost for July assuming the direct labor workforce is adjusted to match the hours required to produce the forecasted number of units produced?

4. What is the estimated total selling and administrative expense for July?

A machine can be purchased for $160,000 and used for five years, yielding the following net incomes. In projecting net incomes, straight-line depreciation is applied, using a five-year life and a zero salvage value.

Compute the machine’s payback period (ignore taxes). (Round your intermediate calculations to 3 decimal places and round payback period answer to 3 decimal places.)

Year       Net Income        Depreciation      Net Cash Flow   Cumulative Cash Flow   

0                                              (160,000)             $(160,000)          

1              $10,700                                                                

2              26,700                                  

3              57,000                                  

4              40,100                                  

5              106,800                                                

Payback period =                             

Scenario: You are a loan officer for White Sands Bank of Taos. Paul Jason, president of P. Jason Corporation, has just left your office. He is interested in an 8-year loan to expand the company's operations. The borrowed funds would be used to purchase new equipment. As evidence of the company's debt-worthiness, Jason provided you with facts (available in the attached Scenario Worksheet). Jason is a very insistent (some would say pushy) man. When you told him you would need additional information before making your decision, he acted offended and said, "What more could you possibly want to know?" You responded you would , at minimum, need complete, audited financial statements.

Develop a minimum 700-word examination of the financial statements and include the following:

• Explain why you would want the financial statements to be audited.
• Discuss the implications of the ratios provided for the lending decision you are to make. That is, does the information paint a favorable picture? Are these ratios relevant to the decision? State why or why not.
• Evaluate trends in the performance of P. Jason Corporation. Identify each performance measure as favorable or unfavorable and explain the significance of each.
• List three other ratios you would want to calculate for P. Jason Corporation, and in your own words explain in detail why you would use each.
• As the loan officer, what else would you do to gain a better understanding of Paul Jason's, and the Corporation's financial picture and why?
• Based on your analysis of P. Jason Corporation, will you recommend approval for the requested loan? Provide specific details to support your decision.

Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc., has been experiencing financial difficulty for some time. The company’s contribution format income statement for the most recent month is given below:

Required:

1. Compute the company’s CM ratio and its break-even point in unit sales and dollar sales.

2. The president believes that a $6,500 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an $89,000 increase in monthly sales. If the president is right, what will be the increase (decrease) in the company’s monthly net operating income?

3. Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $39,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net operating income (loss)?

4. Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop computer battery would grow sales. The new package would increase packaging costs by $0.50 per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $4,200?

5. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $57,000 each month.

a. Compute the new CM ratio and the new break-even point in unit sales and dollar sales.

b. Assume that the company expects to sell 20,900 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are. (Show data on a per unit and percentage basis, as well as in total, for each alternative.)

c. Would you recommend that the company automate its operations (Assuming that the company expects to sell 20,900)?

1. How do IFRS and U.S. GAAP differ with respect to the classification of debt that is expected to be refinanced?

2. What is the difference between the use of the term contingent liability in U.S. GAAP and IFRS?

Thank you!

A machine can be purchased for $252,000 and used for five years, yielding the following net incomes. In projecting net incomes, double-declining depreciation is applied, using a five-year life and a zero salvage value.

Compute the machine’s payback period (ignore taxes). (Round payback period answer to 3 decimal places.)

Computation of Annual Depreciation Expense

Year       Beginning Book Value    Annual Depr. (40% of Book Value)            Accumulated Depreciation at Year-End                Ending Book Value          

1                                                                             

2                                                             

3                                                             

4                                                             

5                                                             

Annual Cash Flows

Year       Net income         Depreciation      Net Cash Flow   Cumulative Cash Flow   

0              $(252,000)                                           $(252,000)          

1              13,000                                  

2              28,000                                  

3              62,000                                  

4              48,000                                  

5              101,000                                                

Payback period =                              years

Horizontal Analysis of the Income Statement

Income statement data for Winthrop Company for two recent years ended December 31, are as follows:

a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. If required, round to one decimal place.

b. The net income for Winthrop Company increased between years. This increase was the combined result of an   in sales and  percentage   in cost of goods sold. The cost of goods sold increased at a   rate than the increase in sales, thus causing the percentage increase in gross profit to be   than the percentage increase in sales.

Current Position Analysis

The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years:

a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.

b. The liquidity of Nilo has   from the preceding year to the current year. The working capital, current ratio, and quick ratio have all  . Most of these changes are the result of an   in current assets relative to current liabilities.

How long will it take for $1,000 to amount to $10,000 if invested at 6% compounded monthly? Express the answer in years, rounded to two decimal places

Clopack Company manufactures one product that goes through one processing department called Mixing. All raw materials are introduced at the start of work in the Mixing Department. The company uses the weighted-average method of process costing. Its Work in Process T-account for the Mixing Department for June follows (all forthcoming questions pertain to June):

The June 1 work in process inventory consisted of 4,700 units with $16,040 in materials cost and $12,960 in conversion cost. The June 1 work in process inventory was 100% complete with respect to materials and 60% complete with respect to conversion. During June, 37,200 units were started into production. The June 30 work in process inventory consisted of 8,200 units that were 100% complete with respect to materials and 50% complete with respect to conversion.

What is the cost of beginning work in process inventory plus the cost added during the period for conversion?

What is the cost per equivalent unit for materials?

What is the cost per equivalent unit for conversion?

What is the cost of ending work in process inventory for materials?

What is the cost of ending work in process inventory for conversion?

What is the cost of materials transferred to finished goods?

What is the amount of conversion cost transferred to finished goods?

Prepare the journal entry to record the transfer of costs from Work in Process to Finished Goods

What is the total cost to be accounted for?

What is the total cost accounted for?