Fast-Flow Paints produces mixer base paint through a two–stage process, Mixing and Packaging. The following events depict the movement of value into and out of production. Journalize each event if appropriate; if not, provide a short narrative reason as to why you chose not to journalize the action. Nelson, the production manager, accepts an order to continue processing the current run of mixer base paint.

Prepare the journal entries for each event depict the movement of value into and out of production on December 31. Refer to the Chart of Accounts for exact wording of account titles. Round answers to the nearest dollar.

PAGE 1

JOURNAL

c. Nelson, who is paid a salary but earns about $35.00 per hour, spends one hour inspecting the production line.

Nelson's inspection of the assembly line is     chargeable to production. Since he is the manager of a production unit, it will be incorporated in the cost of production through the allocation of overhead.

Creative Computing sells a tablet computer called the Protab. The $605 sales price of a Protab Package includes the following:

• One Protab computer.
• A 6-month limited warranty. This warranty guarantees that Creative will cover any costs that arise due to repairs or replacements associated with defective products for up to six months.
• A coupon to purchase a Creative Probook e-book reader for $325, a price that represents a 50% discount from the regular Probook price of $650. It is expected that 20% of the discount coupons will be utilized.
• A coupon to purchase a one-year extended warranty for $55. Customers can buy the extended warranty for $55 at other times as well. Creative estimates that 30% of customers will purchase an extended warranty.
• Creative does not sell the Protab without the limited warranty, option to purchase a Probook, and the option to purchase an extended warranty, but estimates that if it did so, a Protab alone would sell for $585.

All Protab sales are made in cash.

Required:
1. & 2. Indicated below whether each item is a separate performance obligation and allocate the transaction price of 120,000 Protab Packages to the separate performance obligations in the contract.
3. Prepare a journal entry to record sales of 120,000 Protab Packages (ignore any sales of extended warranties).

Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2018, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,780,000. Curtiss concludes that the contract does not qualify for revenue recognition over time. The building was completed on December 31, 2020. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows:

Required:
1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years.
2. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years.
3. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown in the balance sheet at the end of 2018 and 2019 as either cost in excess of billings or billings in excess of costs.

Mary Willis is the advertising manager for Culver Shoe Store. She is currently working on a major promotional campaign. Her ideas include the installation of a new lighting system and increased display space that will add $14,000 in fixed costs to the $133,000 currently spent. In addition, Mary is proposing that a 5% price decrease ($20 to $19) will produce a 20% increase in sales volume (20,000 to 24,000). Variable costs will remain at $12 per pair of shoes. Management is impressed with Mary’s ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety.

A)

Current break-even point_____________ pairs of shoes

New break-even point________________pairs of shoes

B)

Current Margin of safety ratio _________%

New margin of safety ratio _________%

C)

Prepare a cup income statement for current operations and after Mary's changes are introduced.

Income statement :

Required information

[The following information applies to the questions displayed below.]
  
In 2018, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2020. Information related to the contract is as follows:

Westgate recognizes revenue over time according to percentage of completion.

3. Complete the information required below to prepare a partial balance sheet for 2018 and 2019 showing any items related to the contract. (Do not round intermediate calculations.)

Newago, Inc. is strapped for cash for investment projects and must decide which of four projects it will fund. Below are the projects and information about them:

Life Of:

Net The Internal

Investment Present Project Rate Of

Project Required Value In Yrs. Return

1. 80,000 210,000 6 13%

2. 750,000 340,000 10 17%

3. 845,000 333,000 7 12%

4. 695,000 202,000 5 18%

A. Compute the project profitability index for each project.

B. Rank the four projects in order of preference in terms of:

Internal rate Of Return

Project Profitability Index

Net Value

C. Which of the three rankings above do you prefer?

What are the strengths and weaknesses of each method?  

In a month, I can sell 420 of my unlicensed Warriors T-shirts at a price of $12. At $18, I sell 180. The T-shirts cost me $8 each, and I bribe the local law enforcement $300 per month to use a corner near a BART station to sell my shirts.

1. Assume price-demand is linear

a. Find the slope of the price-demand function.

b. Find the vertical-intercept of the price-demand function.

c. Write a function to predict demand (in a month) given any price.

d. Predict the demand at a price of $10.

e. What price fetches a demand of 800 shirts?

2. Assume cost is linear.

a. Write a function to predict cost (in a month) given any price.

b. Predict the cost at a price of $10.

In May 2018, Regina graduated from the Naval Academy with a degree in engineering and was assigned to San Diego as a permanent duty station. In her move to San Diego, Regina incurred the following costs:

$450 in gasoline.

$250 for renting a truck from UPAYME rentals.

$100 for a tow trailer for her car.

$85 in food. $25 in double espressos from Starbucks.

$300 for motel lodging on the way to San Diego.

$405 for a previous plane trip to San Diego to look for an apartment.

$175 in temporary storage costs for her collection of crystal figurines.

a.) If the government reimburses her $900, how much, if any, may Regina take as a moving expense deduction on her 2018 tax return?

b.) Is that deduction subject to any conditions that could change its deductibility in the future?

Golden Gate Construction Associates, a real estate developer and building contractor in San Francisco, has two sources of long-term capital: debt and equity. The cost to Golden Gate of issuing debt is the after-tax cost of the interest payments on the debt, taking into account the fact that the interest payments are tax deductible. The cost of Golden Gate’s equity capital is the investment opportunity rate of Golden Gate’s investors, that is, the rate they could earn on investments of similar risk to that of investing in Golden Gate Construction Associates. The interest rate on Golden Gate’s $60 million of long-term debt is 10 percent, and the company’s tax rate is 40 percent. The cost of Golden Gate’s equity capital is 15 percent. Moreover, the market value (and book value) of Golden Gate’s equity is $90 million.

The company has two divisions: the real estate division and the construction division. The divisions’ total assets, current liabilities, and before-tax operating income for the most recent year are as follows:

Required:
Calculate the economic value added (EVA) for each of Golden Gate Construction Associates’ divisions. (Round your weighted-average cost of capital to 3 decimal places (i.e. .123). Enter your answers in millions rounded to 3 decimal places (i.e. 1,234,000 should be entered as 1.234)).

- What it is comprehensive auditing, and what are the advantages and disadvantages of comprehensive auditing?

- Should a police service use comprehensive auditing?

You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the company’s costing system and “do what you can to help us get better control of our manufacturing overhead costs.” You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control.

After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March:

During March, the company worked 17,000 machine-hours and produced 11,000 units. The company had originally planned to work 19,000 machine-hours during March.

Required:

1. Complete the report showing the activity variances for March. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

2. Complete the report showing the spending variances for March. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

11. -82
Eddie Industries issues $1,500,000 of 8% bonds at 105. The amount of cash received from the sale is
$1,575,000
$1,000,000
$1,425,000
$1,080,000

12. -83
If the market rate of interest is greater than the contractual rate of interest, bonds will sell
only after the stated rate of interest is increased
at a premium
at face value
at a discount

13. -90
The Glenn Corporation issues 1,000, 10-year, 8%, $2,000 bonds dated January 1 at 96. The journal entry to record
the issuance will show a
debit to Cash of $2,000,000
credit to Bonds Payable for $1,920,000
debit to Discount on Bonds Payable for $80,000
credit to Cash for $1,920,000

14. -92
Bonds with a face amount of $1,000,000 are sold at 106. The journal entry to record the issuance is

15. -58
The market interest rate related to a bond is also called the
effective interest rate
contract interest rate
straight-line rate

stated interest rate

16. TF.12-03
The financial loss that each stockholder in a corporation can incur is usually limited to the amount invested by the
stockholder.
True
False

17. TF.12-05
Double taxation is a disadvantage of a corporation because the corporation has to pay income taxes at twice the
rate applied to partnerships.
True
False

18. TF.12-09
The two main sources of stockholders' equity are investments contributed by stockholders and net income retained
in the business.
True
False

19. TF.12-11
The net increase or decrease in Retained Earnings for a period is recorded by closing entries.
True
False

20. TF.12-38
Before a stock dividend can be declared or paid, there must be sufficient cash.
True
False

Budgets are developed months before the end of the current year and are best guess estimates of future performance. What do you think might be some pitfalls of budgeting, and how can they be avoided?

The following information is provided for X Corporation for the year ending December 31, 2018:

X Corporation has not made an assertion under APB 23 that their non-U.S. undistributed earnings will be invested indefinitely or that the earnings will be solely remitted in a tax-free liquidation. The U.S. statutory rate is 21%. Based on all of the information presented, prepare an effective rate reconciliation showing the dollar amount of each reconciling item (i.e. do not combine potentially immaterial amounts) and the impact of each reconciling item on the effective tax rate.

51.

The relationship of $325,000 to $125,000, expressed as a ratio, is

a. 2.0

b. 2.5

c. 2.6

d. 0.45

52.

The ability of a business to pay its debts as they come due and to earn a reasonable net income is

a. solvency and equity.

b. solvency and leverage.

c. solvency and profitability.

d. solvency and liquidity.

53.

Based on the data for Harding Company, what is the quick ratio, rounded to one decimal point?

0.9

2.6

2.7

1.7

54.

Which of the following measures a company's ability to pay its current liabilities?

times interest earned

current ratio

inventory turnover

earnings per share

55.

Based on the following data for the current year, what is the inventory turnover?

3.0

2.7

2.5

9.7

56.

A company reports the following:

The company's earnings per share on common stock is

$8.50

$13.33

$7.50

$35.00

57.

The purpose of an audit is to

a. determine whether or not a company is a good investment.

b. determine whether or not a company complies with corporate social responsibility.

c. render an opinion on the fairness of the statements.

d. determine whether or not a company is a good credit risk.

58.

Which of the following is required by the Sarbanes-Oxley Act?

a common-sized statement

a vertical analysis

a report on internal control

a price-earnings ratio

59.

The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit.
Assets   

Liabilities and Stockholders' Equity   

Income Statement

What are the dividends per common share for Diane Company?

a. $0.67

b. $20.00

c. $3.00

d. $1.50

60.

Assume the following sales data for a company:

What is the percentage increase in sales from the preceding year to the current year?

76.9%

70%

50%

30%