Precision Construction entered into the following transactions during a recent year.

Required:

1. 1-a. Complete the table below, for the above transactions. (Enter any decreases to Assets, Liabilities, or Stockholders' Equity with a minus sign.)

2. 1-b. Prepare the journal entries for each of the above transactions.

3. 2. For the tangible and intangible assets acquired in the preceding transactions, determine the amount of depreciation and amortization that Precision Construction should report for the quarter ended March 31. The equipment is depreciated using the double-declining-balance method with a useful life of five years and $48,000 residual value.

4. 3. Prepare a journal entry to record the depreciation and amortization calculated in requirement 2.

Problem 16-4 Change in tax rate; record taxes for four years [LO16-1, 16-5]

Zekany Corporation would have had identical income before taxes on both its income tax returns and income statements for the years 2018 through 2021 except for differences in depreciation on an operational asset. The asset cost $130,000 and is depreciated for income tax purposes in the following amounts:

  
The operational asset has a four-year life and no residual value. The straight-line method is used for financial reporting purposes.
  
Income amounts before depreciation expense and income taxes for each of the four years were as follows.
   

  
Assume the average and marginal income tax rate for 2018 and 2019 was 30%; however, during 2019 tax legislation was passed to raise the tax rate to 40% beginning in 2020. The 40% rate remained in effect through the years 2020 and 2021. Both the accounting and income tax periods end December 31.
   
Required:
Prepare the journal entries to record income taxes for the years 2018 through 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Target Costing

Laser Cast, Inc., manufactures color laser printers. Model J20 presently sells for $525 and has a total product cost of $420, as follows:

It is estimated that the competitive selling price for color laser printers of this type will drop to $500 next year. Laser Cast has established a target cost to maintain its historical markup percentage on product cost. Engineers have provided the following cost reduction ideas:

1. Purchase a plastic printer cover with snap-on assembly, rather than with screws. This will reduce the amount of direct labor by 9 minutes per unit.
2. Add an inspection step that will add six minutes per unit of direct labor but reduce the materials cost by $11 per unit.
3. Decrease the cycle time of the injection molding machine from four minutes to three minutes per part. Thirty percent of the direct labor and 42% of the factory overhead are related to running injection molding machines.

The direct labor rate is $34 per hour.

a. Determine the target cost for Model J20 assuming that the historical markup on product cost and selling price is maintained. Round your final answer to two decimal places.
$

b. Determine the required cost reduction. Enter as a positive number. Round your final answer to two decimal places.
$

c. Evaluate the three engineering improvements together to determine if the required cost reduction (drift) can be achieved. Enter all amounts as positive numbers. Do not round interim calculations but round your final answers to two decimal places.

At the beginning of the year, Swifty Company had total assets of $862,000 and total liabilities of $600,000. Answer the following questions.

(a) If total assets increased $137,000 during the year and total liabilities decreased $70,000, what is the amount of stockholders’ equity at the end of the year?

(b) During the year, total liabilities increased $120,000 and stockholders’ equity decreased $84,000. What is the amount of total assets at the end of the year?
(c) If total assets decreased $77,000 and stockholders’ equity increased $101,000 during the year, what is the amount of total liabilities at the end of the year?

Q#6) Calculate the payback period for the following: a) Project A: Initial Cost $80,000 earns $19,000 per year. Project B: Initial Cost $100,000 earns $25,000 per year and b) What are the downsides of using of using payback period to analyze a project? c) What could you consider as limitations of Net Present Value (NPV) and Internal Rate of Return (IRR) approaches in making capital investment decisions? d) What do you know about Profitability Index (PI), Modified Internal Rate of Return (MIRR) and how is MIRR different from IRR?

CVP Analysis of Multiple Products

Steinberg Company produces commercial printers. One is the regular model, a basic model that is designed to copy and print in black and white. Another model, the deluxe model, is a color printer-scanner-copier. For the coming year, Steinberg expects to sell 100,000 regular models and 20,000 deluxe models. A segmented income statement for the two products is as follows:

Required:

1. Compute the number of regular models and deluxe models that must be sold to break even. Round your answers to the nearest whole unit.

2. Using information only from the total column of the income statement, compute the sales revenue that must be generated for the company to break even. Round the contribution margin ratio to four decimal places. Use the rounded value in the subsequent computation. (Express as a decimal-based amount rather than a whole percentage.) Round the amount of revenue to the nearest dollar.

Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of May.

. Critical Accounting Estimates: Select any industry, such as construction, retail, drug manufacturers, financials, capital goods, energy, utilities, services, computer software, computer hardware, Internet, and so forth. What do you think would be the critical accounting estimates of companies in this industry and why?. Critical Accounting Estimates: Select any industry, such as construction, retail, drug manufacturers, financials, capital goods, energy, utilities, services, computer software, computer hardware, Internet, and so forth. What do you think would be the critical accounting estimates of companies in this industry and why?

3. Your company wishes to determine which inventory items generate the most revenue. How could you use QuickBooks to develop this information?

4. At year-end, you wish to confirm the quantity on hand for each inventory item. How would you use QuickBooks to determine the quantity and value of the ending inventory?

5. Your company wishes to view the profitability of each inventory item. How could you use QuickBooks to develop this information?

On January 1, 2018, the general ledger of ACME Fireworks includes the following account balances:
  

  
During January 2018, the following transactions occur:

January 2. Sold gift cards totaling $12,000. The cards are redeemable for merchandise within one year of the purchase date.
January 6. Purchase additional inventory on account, $167,000.
January 15. Firework sales for the first half of the month total $155,000. All of these sales are on account. The cost of the units sold is $83,800.
January 23. Receive $127,400 from customers on accounts receivable.
January 25. Pay $110,000 to inventory suppliers on accounts payable.
January 28. Write off accounts receivable as uncollectible, $6,800.
January 30. Firework sales for the second half of the month total $163,000. Sales include $17,000 for cash and $146,000 on account. The cost of the units sold is $89,500.
January 31. Pay cash for monthly salaries, $54,000.

I need help to ...

3. Prepare an adjusted trial balance as of January 31, 2018.

4. Prepare a multiple-step income statement for the period ended January 31, 2018.

5. Prepare a classified balance sheet as of January 31, 2018.

6. Record closing entries.

7. Calculate the current ratio at the end of January.

8. If the average current ratio for the industry is 1.80, is ACME Fireworks more or less liquid than the industry average?

9. Calculate the acid-test ratio at the end of January.

Lubricants, Inc., produces a special kind of grease that is widely used by race car drivers. The grease is produced in two processing departments—Refining and Blending. Raw materials are introduced at various points in the Refining Department.

The following incomplete Work in Process account is available for the Refining Department for March:

The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $7,200; direct labor, $3,800; and overhead, $20,800.

Costs incurred during March in the Blending Department were: materials used, $45,000; direct labor, $16,400; and overhead cost applied to production, $104,000.

Required:

1. Prepare journal entries to record the costs incurred in both the Refining Department and Blending Department during March. Key your entries to the items (a) through (g) below.

1. Raw materials used in production.
2. Direct labor costs incurred.
3. Manufacturing overhead costs incurred for the entire factory, $666,000. (Credit Accounts Payable.)
4. Manufacturing overhead was applied to production using a predetermined overhead rate.
5. Units that were complete with respect to processing in the Refining Department were transferred to the Blending Department, $692,000.
6. Units that were complete with respect to processing in the Blending Department were transferred to Finished Goods, $780,000.
7. Completed units were sold on account, $1,380,000. The Cost of Goods Sold was $630,000.

2. Post the journal entries from (1) above to T-accounts. The following account balances existed at the beginning of March. (The beginning balance in the Refining Department’s Work in Process is given in the T-account shown above.)

Describe two real life companies that you believe has a "High Fixed Cost Structure" and one that you believe has a "Low Fixed Cost Structure". Explain why you came to this conclusion. Then describe what would happen to your companies' net income if

a) in one year they were able to double their sales

b) in one year their sales would drop by 50%.

Write two paragraphs that briefly define effective writing in your own words and identify your writing strengths and weaknesses

he following items were selected from among the transactions completed by O’Donnel Co. during the current year:

Andretti Company has a single product called a Dak. The company normally produces and sells 82,000 Daks each year at a selling price of $48 per unit. The company’s unit costs at this level of activity are given below:

A number of questions relating to the production and sale of Daks follow. Each question is independent.

Required:

1-a. Assume that Andretti Company has sufficient capacity to produce 98,400 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its sales by 20% above the present 82,000 units each year if it were willing to increase the fixed selling expenses by $120,000. Calculate the incremental net operating income. (Round your answers to the nearest whole number.)

1-b. Would the increased fixed selling expenses be justified?

2. Assume again that Andretti Company has sufficient capacity to produce 98,400 Daks each year. A customer in a foreign market wants to purchase 16,400 Daks. Import duties on the Daks would be $1.70 per unit, and costs for permits and licenses would be $9,840. The only selling costs that would be associated with the order would be $1.60 per unit shipping cost. Compute the per unit break-even price on this order. (Round your answers to 2 decimal places.)

3. The company has 900 Daks on hand that have some irregularities and are therefore considered to be "seconds." Due to the irregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What unit cost figure is relevant for setting a minimum selling price? (Round your answer to 2 decimal places.)

Relevant cost per unit= $ ? Per unit

4. Due to a strike in its supplier’s plant, Andretti Company is unable to purchase more material for the production of Daks. The strike is expected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for the two-month period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manufacturing overhead costs would continue at 35% of their normal level during the two-month period and the fixed selling expenses would be reduced by 20%. What would be the impact on profits of closing the plant for the two-month period? (Any losses should be indicated by a minus sign. Round all calculations (intermediate and final) to whole numbers. Round unit calculations to whole numbers.)

5. An outside manufacturer has offered to produce Daks and ship them directly to Andretti’s customers. If Andretti Company accepts this offer, the facilities that it uses to produce Daks would be idle; however, fixed manufacturing overhead costs would be reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two-thirds of their present amount. Compute the unit cost that can be avoided if purchased from the outside manufacturer. (Do not round intermediate calculations. Round your answer to 2 decimal places.)