John’s Specialty Store uses a periodic inventory system. The following are some inventory transactions for the month of May 2018:

1. John's purchased merchandise on account for $5,900. Freight charges of $750 were paid in cash.
2. John’s returned some of the merchandise purchased in (1). The cost of the merchandise was $1,050 and John’s account was credited by the supplier.
3. Merchandise costing $3,250 was sold for $6,100 in cash.

Required:
Prepare the necessary 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.)

1. Record the merchandise purchased on account for $5,900.

2. Record the payment of freight charges for $750.

3. Record the return of merchandise costing $1,050.

4. Record the sale of merchandise for $6,100 in cash.

5. Record the cost of goods sold for $3,250.

You have been asked to prepare a December cash budget for Ashton Company, a distributor of exercise equipment. The following information is available about the company’s operations:

1. The cash balance on December 1 is $45,000.

2. Actual sales for October and November and expected sales for December are as follows:

Sales on account are collected over a three-month period as follows: 20% collected in the month of sale, 60% collected in the month following sale, and 18% collected in the second month following sale. The remaining 2% is uncollectible.

3. Purchases of inventory will total $371,000 for December. Thirty percent of a month’s inventory purchases are paid during the month of purchase. The accounts payable remaining from November’s inventory purchases total $201,500, all of which will be paid in December.

4. Selling and administrative expenses are budgeted at $506,000 for December. Of this amount, $89,100 is for depreciation.

5. A new web server for the Marketing Department costing $95,000 will be purchased for cash during December, and dividends totaling $13,500 will be paid during the month.

6. The company maintains a minimum cash balance of $20,000. An open line of credit is available from the company’s bank to increase its cash balance as needed.

Required:

1. Calculate the expected cash collections for December.

2. Calculate the expected cash disbursements for merchandise purchases for December.

3. Prepare a cash budget for December. Indicate in the financing section any borrowing that will be needed during the month. Assume that any interest will not be paid until the following month.

On November 1, 2016, Gordon Co. collected $4,920 in cash from its tenant as an advance rent payment on its store location. The six-month lease period ends on April 30, 2017, at which time the contract may be renewed.

1. Use the horizontal model to record the effect of the six months of rent collected in advance on November 1, 2016 for Gordon Co. (Use amounts with + for increases and amounts with – for decreases.)
2. Use the horizontal model to record the effect of the adjustment that will be made at the end of each month to show the amount of rent "earned" during the month for Gordon Co. (Use amounts with + for increases and amounts with – for decreases.)
3. Record the journal entry to show the effect of the six months of rent collected in advance on November 1, 2016 for Gordon Co. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
4. Record the journal entry to show the effect of the adjustment that will be made at the end of each month to show the amount of rent "earned" during the month for Gordon Co. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
5. Calculate the amount of unearned rent that should be shown on the December 31, 2016, balance sheet with respect to this lease.
6. Suppose the advance collection received on November 1, 2016, covered an 30-month lease period at the same amount of rent per month. How should Gordon Co. report the unearned rent amount on its December 31, 2016, balance sheet?

There are four categories of Adjusting Entries: Prepaid Expenses (including Depreciation), Unearned Revenue, Accrued Expenses, and Accrued Revenue. Within each of these categories, there are a lot of examples that we could show.

For this graded discussion, please choose one category of Adjusting Entries. Within that category, choose one example of an adjusting entry that you might make in a company.

1. Please describe why this adjusting entry needs to be made.
2. Please describe the accounts that are affected by making the adjusting entry.
3. Please describe the impact this adjusting entry has on the Income Statement and the Balance Sheet.
4. Which adjusting entry do you think will be most prone to error? It does not have to be the example you chose.

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 64 on December 31, 20Y2.

Required:

Determine the following measures for 20Y2, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year.

You have been asked to carry out research about how Australians use their credit cards. How would you store or classify the information you gather? You can choose more than one option. Why would you organise information in this way? 100–120 words

Here are the questions:

compute the following ratio, compare it to the industry average, and comment. Compute the current ratio.

compute the following ratio, compare it to the industry average, and comment. Compute the quick ratio.

compute the following ratio, compare it to the industry average, and comment. Compute days in inventory.

compute the following ratio, compare it to the industry average, and comment. Compute the ROE using the DuPont Model.

compute the following ratio, compare it to the industry average, and comment. Compute days outstanding in accounts.

compute the following ratio, compare it to the industry average, and comment. Compute the gross margin.

compute the following ratio, compare it to the industry average, and comment. Compute the net income percentage.

compute the following ratio, compare it to the industry average, and comment. Compute the long term debt to equity ratio.

compute the following ratio, compare it to the industry average, and comment. Compute the interest coverage.

compute the following ratio, compare it to the industry average, and comment. Compute the ROA.

compute the following ratio, compare it to the industry average, and comment. Compute the ROE.

James Trading Corporation

Balance Sheet

December 31, 20XX

James Trading Corporation

Income Statement

December 31, 20XX

Industry Average Ratios

Brandlin Company of Anaheim, California, purchases materials from a foreign supplier on December 1, 2017, with payment of 31,000 korunas to be made on March 1, 2018. The materials are consumed immediately and recognized as cost of goods sold at the date of purchase. On December 1, 2017, Brandlin enters into a forward contract to purchase 31,000 korunas on March 1, 2018. Relevant exchange rates for the koruna on various dates are as follows:

Brandlin’s incremental borrowing rate is 12 percent. The present value factor for two months at an annual interest rate of 12 percent (1 percent per month) is 0.9803. Brandlin must close its books and prepare financial statements at December 31.

1. a-1. Assuming that Brandlin designates the forward contract as a cash flow hedge of a foreign currency payable and recognizes any premium or discount using the straight-line method, prepare journal entries for these transactions in U.S. dollars.

2. a-2. Assuming that the purchased parts became a part of the cost of goods sold in 2017, what is the impact on 2017 net income?

3. a-3. What is the impact on 2018 net income?

4. a-4. What is the impact on net income over the two accounting periods?

5. b-1. Assuming that Brandlin designates the forward contract as a fair value hedge of a foreign currency payable, prepare journal entries for these transactions in U.S. dollars.

6. b-2. Assuming that the purchased parts became a part of the cost of goods sold in 2017, what is the impact on net income in 2017 and in 2018?

7. b-3. What is the impact on net income over the two accounting periods?

Randy Inc. produces and sells tablets. The company incurred the following costs for the May:

Required:

Determine each of the following:

During the first month of operations ended May 31, Big Sky Creations Company produced 55,500 designer cowboy boots, of which 51,350 were sold. Operating data for the month are summarized as follows:

During June, Big Sky Creations produced 47,200 designer cowboy boots and sold 51,350 cowboy boots. Operating data for June are summarized as follows:

46. At the beginning of the month, the Painting Department of Skye Manufacturing had 20,000 units in inventory, 70% complete as to materials, and 20% complete as to conversion. The cost of the beginning inventory, $28,650, consisted of $22,400 of material costs and $6,250 of conversion costs. During the month the department started 115,000 units and transferred 120,000 units to the next manufacturing department. Costs added in the current month consisted of $229,600 of materials costs and $540,500 of conversion costs. At the end of the month, the department had 15,000 units in inventory, 40% complete as to materials and 10% complete as to conversion. If Skye Manufacturing uses the weighted average method of process costing, compute the costs per equivalent unit of materials and conversion respectively for the Painting Department.

A. $2.00; $4.50.

B. $1.82; $4.45.

C. $2.05; $4.60.

D. $2.05; $4.45.

E. $2.25; $4.65.

Exercise 19-5 Absorption costing and variable costing income statements LO P2

Rey Company’s single product sells at a price of $231 per unit. Data for its single product for its first year of operations follow.

1. Prepare an income statement for the year using absorption costing
2. Prepare an income statement for the year using variable costing.

It takes two materials to produce our widgets, Material X and Material Y. All of Material X is added at the beginning of processing, and all of Material Y is added at the 30% point in processing. At the beginning of March, there were 8000 units in Work in Process, 20% complete as to processing (Conversion). During March, there were 30000 units started into the process. At the end of March, there were 5000 units in Work in Process, 70% complete as to processing, Our Company uses the FIFO method of process costing. Prepare an equivalent units chart for the month of March

In April, we started 40000 units and completed 39000 units. The ending Work in process for April was 10% complete as to processing. Prepare an equivalent units chart for April.

During a review of financial statements, an accountant decides to emphasize a matter in the review report. Which of the following is an example of a matter that the accountant would most likely want to emphasize?

Question 4 options:

A) The entity has had significant tax expenses as a result of a new tax law.

B) Other entities in the same industry have recently changed from LIFO to FIFO.

C) The IRS has notified the entity that it intends to audit income tax returns for prior years.

D) The entity has had significant transactions with related parties.