4). Grill Time sells its barbecue sets for $170 each. Suppose the company incurs the following average cost per barbecue set:

Direct materials $52

Direct labor 28

Variable manufacturing overhead 11

Variable selling expenses 5

Fixed manufacturing overhead* 24 Total cost $120

* $ 1,800,000 / 75,000 units

Grill Time has enough idle capacity to accept a one-time-only special order from Backyard Living, Inc. for 2,000 barbecue sets at a sales price of $130 per set. Grill Time will not incur $2 of variable selling expenses for this order.

How would accepting the order affect Grill Time's operating income?

In 2013, Apple Inc. sold $17 billion of bonds in the biggest corporate offering on record as the iPhone maker seeks to help finance a $100 billion capital reward for shareholders. This financial policy changed Apple’s capital structure significantly. The leverage ratio of Apple increased after the buyback of common stocks and the issuance of long-term bonds. Repurchase is a way to give it back to shareholders. It is especially the case for Apple as the company has been piling up cash and now shows signs of a slowdown in innovation and growth.

There are several ways a firm could give back to loyal shareholders. Companies could reward shareholders by paying dividends, using existing cash to buy back shares, granting preferred stocks to existing shareholders, or issuing bonds to buy back shares.

Discuss:

1. What is the potential impact of the policy on Apple’s capital structure? Discuss Apple’s financial positions, profitability and risk by analyzing the commitment of cash payment, the tax liabilities, the risk of financial distress, and the growth opportunities.
2. Do you think issuing bonds and using the cash to buy back shares is Apple’s best financial strategy? What would you recommend?

At the end of the December 31 2016 fiscal year, Yin trucking corporation which follows IFRS 16, negotiated and closed a long term lease contract for newly constructed truck terminals and freight storage facilities. The buildings were erected to the company’s specifications on land owned by the company. On January 1 2017, Yin trucking corporation took possession of the leased properties and made a cash payment of 1,048,00$. Although the useful life of each terminal is 40 years, the non cancellable lease runs for 20 years from January 1 2017 with a purchase option available upon expiration of the lease. The 20 year lease is effective for the period January 1 2017 through December 31 2036. Advance rental payments of 900,000$ are payable to the lessor on January 1 of each first 10 years of the lease term. Advance rental payments of 320,000$ are due on January 1 of each first 10 years of the lease term.The company has an option of purchasing all of these leased facilities for 1 million on December 31 2036 although their fair value at that time is to be estimated at 3 million$. At the end of the 40 years, the terminals and the facilities will have no remaining value. Yin trucking must also make annual payments on January 1 of each year to the lessor of 125,000$ for property taxes and 23,00$ for insurance. The lease was negotiated at 6% rate of return.

Required:

1) assuming a capitalized value of terminal facilities at January 1 2017 of 8.7 million, prepare the journal entries for YIN TRUCKING CORPORATION.

a) The signing of the lease

b) the cash payment to the lessor on January 1 2017

c) Depreciation of the cost of the properties for 2017 using the straight line method

d) The accrual of interest expense at December 31 2017 and any other adjusting journal entries

1.Owner's equity for our company is $500,000, and total liabilities are $250,000. The company paid $50,000 in dividends during the year. What do our total assets equal?

$250,000

$300,000

$700,000

$750,000

2.The net income for our company this year is $20,000. The beginning and ending retained earnings balances were $46,000 and $52,000, respectively. The company issued no common stock. Calculate the amount of dividends paid by the company this year.

$14,000

$54,000

$60,000

$106,000

3.Which of the following accounts is increased with a credit?

cash

prepaid insurance

salaries expense

unearned revenue

4.On August 21, we paid four months' rent in advance, which totaled $3,200. What account would we credit when we journalize this entry?

rent expense

cash

prepaid rent

account payable

5.On September 5, we received an $11,400 payment on account. What account would we debit when we journalize this entry?

accounts payable

cash

accounts receivable

fees earned

6.On September 11, we performed $5,750 of service and billed our customer. What account would we credit when we journalize this entry?

service revenue

cash

accounts receivable

retained earnings

7.On September 22, we purchased supplies on account for $1,150. What account would we debit when we journalize this entry?

supplies

cash

accounts payable

supplies expense

Superior Company manufactures three products using the same production process: tables, benches, and planters. The costs incurred up to the split-off point are $250,000. These costs are allocated to the products on the basis of their sales value at the split-off point. The number of units produced, the selling prices per units at each point in production, and the additional processing costs are as follows:

1) Which information is not relevant to the decision on whether or not to process the products further (1 pt)?

2) Prepare an incremental analysis (with labels!) of the three products (6 pts).

3) Which products should be processed further and which should be sold at the split-off point (2 pts)?

4) Would your decision in #3 be different if the company was using quantity of output to allocate joint costs? Explain (1 pt).

Use the Internet to research a recent accounting scandal within the past five years related to irregularities in financial statement reporting.

Using the case (see above) as a reference and from the e-Activity, discuss the improper recognition treatment you researched, and make a recommendation regarding the type of analytical procedure that should have detected the improper accounting transactions. Propose the internal control activities or audit plan that might have detected the improper transactions. Be specific with your recommendation.

1.On January 1 of the current year (Year 1), our company acquired a truck for $75,000. The estimated useful life of the truck is 5 years or 100,000 miles. The residual value at the end of 5 years is estimated to be $5,000. The actual mileage for the truck was 22,000 miles in Year 1 and 27,000 miles in Year 2. What is the depreciation expense for the second year of use (Year 2) if we use the units of production method?

$14,000

$15,400

$16,800

$18,900

2.On January 1, our company purchased a truck for $85,000. The estimated useful life of the truck is 4 years. The residual value at the end of 4 years is estimated to be $5,000.

What is the depreciation expense for the second year of use if we use the double-declining balance method?

What is the balance in accumulated depreciation at the end of the second year of use if we use the double-declining balance method?

What is the book value at the end of the second year of use if we use the double-declining balance method.

3.On January 1, our company purchased a truck for $80,000. The estimated useful life of the truck is 4 years. The residual value at the end of 4 years is estimated to be $10,000. What is the depreciation expense for the third year of use if we use the straight-line method?

$17,500

$20,000

$35,000

$52,500

4.Our company uses the percentage of receivables method to estimate bad debt expense for the year. We had the following account balances on our unadjusted trial balance at the end of the year (December 31): accounts receivable, debit balance of $150,000; allowance for bad debts, debit balance of $1,000. We estimate that 3.5% of accounts receivable at the end of the year are uncollectible. What amount will be debited to bad debt expense when we record the adjusting entry?

$4,000

$4,250

$5,250

$6,250

5.Our company uses the percentage of sales method to estimate bad debt expense for the year. Our allowance for bad debts account has a credit balance of $1,000 prior to the adjusting entry for bad debt expense. We have estimated that 2% of net credit sales will be uncollectible for the current year. Net credit sales for the year totaled $200,000. What amount will be debited to bad debt expense when we record the adjusting entry?

3,000

$4,000

$5,000

$6,000

Multiple Choice Question 82

An analysis of stockholders' equity of Bonita Industries as of January 1, 2018, is as follows:

Bonita uses the cost method of accounting for treasury stock and during 2018 entered into the following transactions:

Acquired 2460 shares of its stock for $78720.
Sold 1890 treasury shares at $36 per share.
Sold the remaining treasury shares at $18 per share.

Assuming no other equity transactions occurred during 2018, what should Bonita report at December 31, 2018, as total additional paid-in capital?

1.

Copy Center pays an average wage of $13 per hour to employees for printing and copying jobs, and allocates $18 of overhead for each employee hour worked. Direct materials are assigned to each job according to actual cost. Jobs are marked up 20% above total manufacturing cost to determine the selling price. If Job M-47 used $370 of direct materials and took 15 direct hours of labor to complete, what is the selling price of the job?

rev: 11_20_2019_QC_CS-191445

• $912.

• $768.

• $678.

• $1,002.

ob A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $2,600 of direct materials and used $4,100 of direct labor. The job was not finished by the end of September, but needed an additional $3,100 of direct materials in October and additional direct labor of $6,600 to finish the job. The company applies overhead at the end of each month at a rate of 150% of the direct labor cost. What is the amount of job costs added to Work in Process Inventory during October?

• $16,400

• $23,700

• $29,400

• $32,450

• $19,600

3.

Mango Company applies overhead based on direct labor costs. For the current year, Mango Company estimated total overhead costs to be $380,000, and direct labor costs to be $190,000. Actual overhead costs for the year totaled $406,000, and actual direct labor costs totaled $214,000. At year-end, the balance in the Factory Overhead account is a:

• $22,000 Debit balance.

• $428,000 Credit balance.

• $406,000 Debit balance.

• $22,000 Credit balance.

• $214,000 Debit balance.

White Diamond Flour Company manufactures flour by a series of three processes, beginning with wheat grain being introduced in the Milling Department. From the Milling Department, the materials pass through the Sifting and Packaging departments, emerging as packaged refined flour.

The balance in the account Work in Process-Sifting Department was as follows on July 1, 2016:

The following costs were charged to Work in Process-Sifting Department during July:

During July, 14,400 units of flour were completed. Work in Process-Sifting Department on July 31 was 1,600 units, 4545 completed.

Chart of Accounts

Cost of Production Report

1. Prepare a cost of production report for the Sifting Department for July.

Journal

2. Journalize the entries for costs transferred from Milling to Sifting and the costs transferred from Sifting to Packaging. Refer to the Chart of Accounts for correct wording of account titles.

PAGE 10

JOURNAL

Final Questions

3. Determine the increase or decrease in the cost per equivalent unit from June to July for direct materials and conversion costs.

4. The cost of production report may be used as the basis for allocating product costs between ________ and ________ . The report can also be used to control costs by holding each department head responsible for the units entering production and the costs incurred in the department. Any differences in unit product costs from one month to another, such as those in part (3), can be studied carefully and any significant differences investigated.

Thornton Corporation estimated its overhead costs would be $23,300 per month except for January when it pays the $182,880 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $206,180 ($182,880 + $23,300). The company expected to use 7,900 direct labor hours per month except during July, August, and September when the company expected 9,100 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season. The company’s actual direct labor hours were the same as the estimated hours. The company made 3,950 units of product in each month except July, August, and September, in which it produced 4,550 units each month. Direct labor costs were $24.00 per unit, and direct materials costs were $10.20 per unit.


Required

1. Calculate a predetermined overhead rate based on direct labor hours.

2. Determine the total allocated overhead cost for January, March, and August.

3. Determine the cost per unit of product for January, March, and August.

4. Determine the selling price for the product, assuming that the company desires to earn a gross margin of $21.30 per unit.

Required information

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

Hart Company made 4,900 bookshelves using 22,000 board feet of wood costing $261,800. The company's direct materials standards for one bookshelf are 5 board feet of wood at $11.80 per board foot.

(1) Compute the direct materials price and quantity variances incurred in manufacturing these bookshelves.

AQ = Actual Quantity
SQ = Standard Quantity
AP = Actual Price
SP = Standard Price

Reed Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures.

During June the company incurred the following actual costs to produce 8,500 units.

AQ = Actual Quantity
SQ = Standard Quantity
AP = Actual Price
SP = Standard Price

AH = Actual Hours
SH = Standard Hours
AR = Actual Rate
SR = Standard Rate

(1) Compute the direct materials price and quantity variances.
(2) Compute the direct labor rate variance and the direct labor efficiency variance. Indicate whether each variance is favorable or unfavorable.

The December 31, 20X8, balance sheets for Pint Corporation and its 70 percent-owned subsidiary Saloon Company contained the following summarized amounts:

Pint acquired the shares of Saloon Company on January 1, 20X7. On December 31, 20X8, assume Pint sold inventory to Saloon during 20X8 for $111,000 and Saloon sold inventory to Pint for $303,000. Pint’s balance sheet contains inventory items purchased from Saloon for $99,000. The items cost Saloon $59,000 to produce. In addition, Saloon’s inventory contains goods it purchased from Pint for $33,000 that Pint had produced for $19,800. Assume Saloon reported net income of $73,000 and dividends of $14,600.

Required:
a. Prepare all consolidation entries needed to complete a consolidated balance sheet worksheet as of December 31, 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)

b. Prepare a consolidated balance sheet worksheet as of December 31, 20X8. (Do not round intermediate calculations. Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)