Ronaldo Company has not yet prepared the statement of cash flows. The Balance sheet as of December 31, 2018 and January 1, 2018 and the additional information regarding the statement of income and retained earnings for the year are presented below.
Ronaldo Company
Comparative Balance Sheet
(Dollars in Millions)
Assets 12/31/2018 1/1/2018
Current Assets:
Cash $ 98 $ 158
Account Receivables 1,290 1,160
Inventory 1,320 1,230
Total Current Assets 2,708 2,548
Property, Plant, and Equipment 3,030 2,932
Less Accumulated Depreciation 1,530 1,282
Net Property, Plant, and Equipment 1,500 1,650
Total Assets $4,208 $4,198
Liability and Equity
Current Liability:
Account payable $500 $310
Accrued Liability 380 330
Income tax payable 152 140
Total current Liability $1,032 $780
Bonds payable 900 1,240
Total Liability 1,932 2,020
Stockholders’ Equity:
Common Stock 322 322
Retained earnings 1,954 1,856
Total Stockholders’ Equity 2,276 2,178
Total Liability and Stockholders’ Equity $4,208 $4,208
Ronaldo Income statement ((Dollars in Millions)
Net Income $7,200
Cost of goods sold 5,100
Gross Margin 2,100
Selling and administrative Expenses 1,750
Net Operating Income 350
Nonoperation items:
Gain on sale of Equipment 6
Income before Taxes 356
Income tax 126
Net Income $ 230
Ronaldo also provided the following information:
Required:
ANSWER PART 3 AND 4
In: Accounting
Work in Process Account Data for Two Months; Cost of Production Reports
Hearty Soup Co. uses a process cost system to record the costs of processing soup, which requires the cooking and filling processes. Materials are entered from the cooking process at the beginning of the filling process. The inventory of Work in Process—Filling on April 1 and debits to the account during April were as follows:
Bal., 1,200 units, 70% completed: | ||
Direct materials (1,200 x $4.30) | $ 5,160 | |
Conversion (1,200 x 70% x $1.80) | 1,512 | |
$ 6,672 | ||
From Cooking Department, 29,160 units | $128,304 | |
Direct labor | 33,864 | |
Factory overhead | 18,234 |
During April, 1,200 units in process on April 1 were completed, and of the 29,160 units entering the department, all were completed except 3,500 units that were 40% completed. Charges to Work in Process—Filling for May were as follows:
From Cooking Department, 33,500 units | $154,100 |
Direct labor | 44,620 |
Factory overhead | 24,020 |
During May, the units in process at the beginning of the month were completed, and of the 33,500 units entering the department, all were completed except 1,600 units that were 20% completed.
Required:
1. Enter the balance as of April 1 in a four-column account for Work in Process—Filling. Record the debits and credits in the account for April. Construct a cost of production report and present computations for determining (a) equivalent units of production for materials and conversion; (b) cost per equivalent unit; (c) cost of goods finished, differentiating between units started in the prior period and units started and finished in April; and (d) work in process inventory. If an amount box does not require an entry, leave it blank.
2. Provide the same information for May by recording the May transactions in the four-column work in process account. Construct a cost of production report and present the May computations (a through d) listed in part (1). If an amount box does not require an entry, leave it blank.
In: Accounting
The Regal Cycle Company manufactures three types of bicycles—a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow:
Total | Dirt Bikes |
Mountain Bikes | Racing Bikes |
|||||||||
Sales | $ | 918,000 | $ | 263,000 | $ | 404,000 | $ | 251,000 | ||||
Variable manufacturing and selling expenses | 463,000 | 112,000 | 192,000 | 159,000 | ||||||||
Contribution margin | 455,000 | 151,000 | 212,000 | 92,000 | ||||||||
Fixed expenses: | ||||||||||||
Advertising, traceable | 69,300 | 8,900 | 40,100 | 20,300 | ||||||||
Depreciation of special equipment | 44,700 | 20,900 | 7,900 | 15,900 | ||||||||
Salaries of product-line managers | 114,800 | 40,700 | 38,300 | 35,800 | ||||||||
Allocated common fixed expenses* | 183,600 | 52,600 | 80,800 | 50,200 | ||||||||
Total fixed expenses | 412,400 | 123,100 | 167,100 | 122,200 | ||||||||
Net operating income (loss) | $ | 42,600 | $ | 27,900 | $ | 44,900 | $ | (30,200) | ||||
*Allocated on the basis of sales dollars.
Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as to whether or not the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear out.
Required:
1. What is the financial advantage (disadvantage) per quarter of discontinuing the racing bikes?
2. Should the production and sale of racing bikes be discontinued?
3. Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long-run profitability of the various product lines.
In: Accounting
Use the percentage method to compute the federal income taxes to withhold from the wages or salaries of each employee. If an amount is zero, enter "0". Round your calculations and final answers to the nearest cent.
Click here to access the Table of Allowance Values.
Click here to access the Percentage Method Tables.
Employee No. |
Employee Name |
Marital Status |
No. of Withholding Allowances |
Gross Wage or Salary |
Amount to Be Withheld |
|
1 | Amoroso, A. | M | 5 | $1,610 | weekly | $ |
2 | Finley, R. | M | 2 | 825 | biweekly | |
3 | Gluck, E. | S | 6 | 9,630 | quarterly | |
4 | Quinn, S. | S | 8 | 925 | semimonthly | |
5 | Treave, Y. | M | 2 | 2,875 | monthly |
In: Accounting
The new Christmas scheme worked so well that Ariel, Shanice, Isaac, and Tyrone decided to try it also. They decided that no person would receive a gift from the person to whom s/he gave one. Unbeknownst to the others, each friend decided to give a gift card, but each chose a different kind. In addition, none of the friends gave or received a gift card that shared its first letter with his or her name. The person to whom Ariel gave a card was the person who gave the Starbucks gift. The other three cards were for Amazon, iTunes, and Target. The person whose name begins with the same letter as the card that Shanice gave was the person who received the Target card from the friend whose name begins with the same letter as the gift that Shanice received. Who gave what card to whom?
Can you please explain step by step.
In: Accounting
Blossom Corporation has 10.60 million shares of common stock issued and outstanding. On June 1, the board of directors voted an 73 cents per share cash dividend to stockholders of record as of June 14, payable June 30.
a) Prepare the journal entries for each of the dates above assuming the dividend represents a distribution of earnings. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
b) How would the entries differ if the dividend were a liquidating dividend? (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
In: Accounting
The accountant for Bright Products, Inc., has analyzed the
manufacturing overhead costs for the company’s assembly department.
The fixed and variable costs follow:
Variable Cost Element per Hour | Monthly Fixed Cost Element |
|||||||
Indirect labor | $ | 1.40 | $ | 1,760 | ||||
Payroll taxes | 0.21 | 140 | ||||||
Indirect materials | 0.19 | 140 | ||||||
Utilities | 0.36 | 240 | ||||||
Depreciation | - | 1,160 | ||||||
Taxes and insurance | - | 460 | ||||||
Maintenance | 0.21 | 240 | ||||||
Required:
Indirect labor | $ | 3,814 | |
Payroll taxes | 259 | ||
Indirect materials | 444 | ||
Utilities | 816 | ||
Depreciation | 1,160 | ||
Taxes and insurance | 439 | ||
Maintenance | 534 | ||
Prepare a departmental monthly overhead performance report
comparing actual costs with the budget allowance for the total
number of hours worked.
Analyze:
If Bright Products, Inc., operates at the expected production level
of 2,100 direct labor hours, what total manufacturing overhead cost
is projected per direct labor hour?
Prepare a flexible budget for the department for the month of May 2019, assuming that the expected production is for 2,100 direct labor hours. Show costs for production levels of 90 percent and 110 percent of the expected production level of 2,100 hours. (Round your answer to 2 decimal places.)
a. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
b.
Prepare a departmental monthly overhead performance report comparing actual costs with the budget allowance for the total number of hours worked. (Enter all amounts as positive values. Round amounts to the nearest dollar.)
|
c.
If Bright Products, Inc., operates at the expected production level of 2,100 direct labor hours, what total manufacturing overhead cost is projected per direct labor hour? (Round your answer to 2 decimal places.)
|
_________
In: Accounting
The global COVID-19 pandemic have resulted in many companies contemplating to shut down or close permanently their operations. Discuss the decisions that must be considered by management before taking such a move.
In: Accounting
As a recently hired MBA intern, you are working in a consulting capacity to provide an analysis for Al Dente's Italian Restaurant. A financial income Statement is presented below: Sales $2,698,000 Cost of sales (all variable) $1,557,563 Gross Margin $1,140,438 Operating expenses: Variable $277,975 Fixed $213,675 Total operating expenses: $491,650 Administative expenses (all fixed) $564,375 Net operating income $84,413 This income statement presents the sales, expenses and pre-tax operating income for a local eating facility. At Al Dente, the average meal cost for lunches and dinners are $20 and $40 respectively. Al Dente serves both lunch and dinner 300 days per year and serves twice as many lunches as dinners.
5. In order to increase NOI, the owner of the restaurant is considering adjustments to the quality of food ingredients currently used. Rather than using premium ingredients, use of average quality ingredients would reduce the cost of food by 15%. The owner proposes to not change the current meal pricing. As the consultant, prepare a memo to the owner that presents the pros and cons of this change in operations. What are the potential impacts on revenue, costs, and net operating income may result from this change? The owner does not want to see a decrease in net operating income. Could the owner make this change and absorb a decrease in customers, and how would you demonstrate numerically to support your analysis? What other factors or consequences of this decision should the owner consider besides the financial impact of the change?
In: Accounting
Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $35 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally:
Per Unit | 15,000 Units Per Year |
|||||
Direct materials | $ | 14 | $ | 210,000 | ||
Direct labor | 10 | 150,000 | ||||
Variable manufacturing overhead | 3 | 45,000 | ||||
Fixed manufacturing overhead, traceable | 6 | * | 90,000 | |||
Fixed manufacturing overhead, allocated | 9 | 135,000 | ||||
Total cost | $ | 42 | $ | 630,000 | ||
*One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value).
Required:
1. Assuming the company has no alternative use for the facilities that are now being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 15,000 carburetors from the outside supplier?
2. Should the outside supplier’s offer be accepted?
3. Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed capacity to launch a new product. The segment margin of the new product would be $150,000 per year. Given this new assumption, what would be financial advantage (disadvantage) of buying 15,000 carburetors from the outside supplier?
4. Given the new assumption in requirement 3, should the outside supplier’s offer be accepted?
In: Accounting
The manager of Dukey’s Shoe Station estimates operating costs for the year will include $405,000 in fixed costs. Required: a. Find the break-even point in sales dollars with a contribution margin ratio of 50 percent. b. Find the break-even point in sales dollars with a contribution margin ratio of 30 percent. c. Find the sales dollars required to generate a profit of $250,000 for the year assuming a contribution margin ratio of 50 percent.
In: Accounting
Please assume that you are creating a product. (production of text books) For your product, please perform the following:
1) Identify at least ten costs related to your product (Direct materials, Direct labor, Overhead, Period costs) - you much use each category at least once. Determine the value of each of these costs on a per unit level. Refer to lecture for additional explanation.
2) List each of your costs to determine the Total Product cost of your product.
3) Determine a reasonable Sales price for your product.
4) Determine the amount of Target profit you would like to earn from this product for each of the next three years.
5) Calculate Break-even based on your Target profit for each of the three years.
6) Create a proforma Income statement for each of the three years.
In: Accounting
Risks are part and parcel of investing. Propose methods generally used to manage risk by any potential investor.
In: Accounting
The cash account of the Malpractice Medical Company at May 31, 2019 is $35,670. The bank statement indicated a balance of $43,525 on May 31. Comparing the bank statement, the cancelled checks and the accompanying memos with the records revealed the following reconciling items:
Required:
Prepare a bank reconciliation as of May 31, 2019
Journalize the necessary adjusting entries
In: Accounting
On July 1, 2020, Adams Company acquired a new machine for $
200,000 and estimated that it would have a useful life of 10 years
and residual value of $ 10,000. On January 2, 2022, Adams spent $
31,500 to perform a major overhaul on the equipment which improved
the efficiency of the machine by 20%. Due to this change, Adams
believed that the machine should have a total useful life of 12
years and residual value should be increased by $ 4,000. On
November 1, 2023, the machine was sold for $ 110,000. The company
uses straight line method of depreciation and closes its book on
December 31.
Required: 1. Calculate the carrying value of the equipment at
December 31, 2021.
2. Calculate depreciation expense for 2022.
3. Prepare the journal entry on November 1, 2023.
In: Accounting