The following transactions occurred for Mouawad Inc.

Identify the accounts affected and give the amounts by which they would be increased or decreased. (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.)

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State the amount of any cash flow and whether cash is increased or decreased.

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Identify how each item would be reported in Mouawad’s statement of cash flows.

Crossfire Company segments its business into two regions—East and West. The company prepared a contribution format segmented income statement as shown below:

Required:

1. Compute the companywide break-even point in dollar sales.

2. Compute the break-even point in dollar sales for the East region.

3. Compute the break-even point in dollar sales for the West region.

4. Prepare a new segmented income statement based on the break-even dollar sales that you computed in requirements 2 and 3. Use the same format as shown above. What is Crossfire’s net operating income (loss) in your new segmented income statement?

5. Do you think that Crossfire should allocate its common fixed expenses to the East and West regions when computing the break-even points for each region?

During Heaton Company’s first two years of operations, it reported absorption costing net operating income as follows:

* $3 per unit variable; $249,000 fixed each year.

The company’s $34 unit product cost is computed as follows:

Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment and buildings.

Production and cost data for the first two years of operations are:

Required:

1. Using variable costing, what is the unit product cost for both years?

2. What is the variable costing net operating income in Year 1 and in Year 2?

3. Reconcile the absorption costing and the variable costing net operating income figures for each year.

10.The Fast & Furious Company produces two products: toy planes and toy race cars. They use departmental overhead rates for the two production departments: molding and finishing. Molding uses machine hours to assign overhead and Finishing uses direct labor hours. 50,000 planes and 250,000 race cars are produced. Please find the following data: Molding Finishing Total Estimated Overhead $250,000 $100,000 $350,000 Actual Overhead $240,000 $120,000 $360,000 Expected Direct Labor Hours planes 5,000 5,000 10,000 race cars 5,000 35,000 40,000 Expected Machine Hours planes 17,000 3,000 20,000 race cars 3,000 7,000 10,000 Actual Direct Labor Hours planes 4,500 5,300 10,000 race cars 5,500 34,500 40,000 Actual Machine Hours planes 16,500 3,500 20,000 race cars 3,200 6,800 10,000 What are the departmental overhead rates for the molding and finishing department respectively?

a.$12.50; $2.50 b.$25; $10 c.$8.33; $2 d.$25; $2.50

Current Situation
Milan Fashions is ultimately looking to expand its manufacturing operations and this means selling more of its products via the internet. The company saw it would have to do the following:
Expand their presence on the internet by enhancing the company’s website. This meant making it more interactive as well as innovative. Here a potential customer would have the ability to design a coat or outerwear online given the fabric, styles, and designs that the company had available. This would allow the customer to be creative and add more accessories to the coat and have an idea what the item would cost. This type of custom-made coat or outwear would allow the customer to have variety in their styles and design, and stay within their budget.
The enhancement of the online sales would also mean a possible creation of a customer service department to handle technical issues as well as customer complaints. These were bound to happen since there will always be some errors in the manufacturing process or with the online system.
The manufacturing operations would have to be enhanced and rearranged in order to handle unique customer orders. This meant having the variety of fabrics and materials available for the coats and outwear, the cutting of the fabrics and materials, and assembling, inspecting, and preparation for shipment of the order. With enough orders coming in, then there would be little to no idle time of the employees in the manufacturing facility.
The logistics could be handled by working with noted delivery companies which could ship the completed product from the manufacturing facility as soon as the item was completed. There would be an extra charge for delivery on rush orders.

Financial Information
Joseph and Thomas decided to first approach the bank where they had a line of credit and had received business loans in the past, First United. They had approached the bank on numerous occasions for small and large loans and this would be the largest they had ever applied for. After consulting with the relationship manager at the bank, Joseph and Thomas would need to provide the bank with their income statements and balance sheets from 2012 to 2016. From there the bank’s commercial lending officer and credit analyst would perform the following ratio analysis:
Current ratio Long-term debt-to-Equity ratio Debt-to-Equity ratio Total Debt ratio Financial leverage ratio Inventory turnover Fixed asset turnover Debt-to-Capital ratio Interest coverage ratio Return on Assets

Assignment:
First United Bank Paterson, New Jersey Serving the Greater Paterson Community since 1949
To: Associate Credit Analyst
From: Ralph Vicente – Senior Vice President, Commercial Loan Division
Date: March 9, 2017
Re: Milan Fashions Coat Company

The Milan Fashions Coat Company produces and sells to retail stores various types of coats and outerwear including women’s, children’s and men’s outer garments. They are looking to expand and diversify their product line and sell on-line so they are coming to us for a $3 million commercial loan. The company’s five most recent balance sheets and income statements were presented to First United in order to support their loan request. As you can see from the attached income statements and balance sheets from 2012 to 2016, they have had increases in net sales since 2012 but their net income has been up and down for the same time period.

The amount requested is broken down as:
Expand, enhance, and maintain company website $1,000,000
Expand and enhance manufacturing operations $1,500,000
Creation and maintenance of customer service center $500,000
Total loan request $3,000,000

Milan Fashions Coat Company has been a long-time client of the bank and borrowed funds from us on previous occasions. The company has grown in terms of sales, assets, and equity; however, this is the largest loan that the company has ever applied for in their entire history.

I would like you to analyze the company’s loan request and financial statements. You must provide the following:
A. Calculate the financial ratios for 2016 and 2015 comparing them to the industry norms found on the page following the financial statements.
B. Of the financial ratios that are used for the industry standard, which do you feel are most important when determining whether First United should approve the loan to Milan Fashions? What do you feel are the strong and weak points of the company in your financial analysis?
C. Based upon your financial ratio analysis, what questions would you like to propose to management to gain clarity on the business operations?
D. Based upon the financial ratio analysis you will have performed on Milan Fashions, would do you recommend that there should be an approval of the loan request? I want you to state your analysis in a detailed memorandum to me by Monday of next week. I would like to discuss your analysis and hear your ideas on Milan Fashions in a meeting on Tuesday. The clients will be in our offices next Friday to discuss their loan request. Please feel free to contact me if there are any questions on this matter.

Milan Fashions Income Statements As of December 31st, 2012, to 2016

Milan Fashions Balance Sheets As of December 31st, 2012, to 2016

Industry Financial Ratio Standards

What is the computations for the following answers? I can't figure this one out.

The following information relates to Hudson City for its fiscal year ended December 31, 2017. • During the year, retailers in the city collected $1,700,000 in sales taxes owed to the city. As of December 31, retailers have remitted $1,100,000. $200,000 is expected in January 2018, and the remaining $400,000 is expected in April 2018. • On December 31, 2016, the Foundation for the Arts pledged to donate $1, up to a maximum of $1 million, for each $3 that the museum is able to collect from other private contributors. The funds are to finance construction of the city-owned art museum. During 2017, the city collected $600,000 and received the matching money from the Foundation. In January and February 2018 it collected an additional $2,400,000 and also received the matching money. • During the year the city imposed license fees on street vendors. All vendors were required to purchase the licenses by September 30, 2017. The licenses cover the one-year period from October 1, 2017, through September 30, 2018. During 2017 the city collected $240,000 in license fees. • The city sold a fire truck for $40,000 that it had acquired five years earlier for $250,000. At the time of sale the city had charged $225,000 in depreciation. • The city received a grant of $2 million to partially reimburse costs of training police officers. During the year the city incurred $1,500,000 of allowable costs and received $1,200,000. It expects to incur an additional $500,000 in allowable costs in January 2018 and to be reimbursed for all allowable costs by the end of February 2018. Refer to the two lists that follow. Select the appropriate amounts from the lettered list for each item in the numbered list. An amount may be selected once, more than once, or not at all. 1. Amount of sales tax revenue that the city should recognize in its funds statements e. $40,000 2. Amount of sales tax revenue the city should recognize as revenue in government-wide statements m. $1,000,000 3. Increase in deferred inflows in funds statements from sales tax revenues not yet received e. $40,000 4. Contribution revenue from Foundation for the Arts to be recognized in funds statements h. $225,000 5. Contribution revenue from Foundation for the Arts to be recognized in government-wide statements h. $225,000 6. Revenue from license fees to be recognized in funds statements j. $400,000 7. Increase in general fund balance owing to sale of fire engine c. $15,000 8. Increase in net position (government-wide statements) owing to sale of fire engine c. $15,000 9. Revenue in fund statements from police training grant p. $1,500,000 10. Revenue in government-wide statements from police training grant p. $1,500,000

MCO Leather Goods manufactures leather purses. Each purse requires 3 pounds of direct materials at a cost of $4 per pound and 0.7 direct labor hours at a rate of $14 per hour. Variable manufacturing overhead is charged at a rate of $2 per direct labor hour. Fixed manufacturing overhead is $17,000 per month. The company’s policy is to end each month with direct materials inventory equal to 20% of the next month’s materials requirement. At the end of August the company had 4,180 pounds of direct materials in inventory. The company’s production budget reports the following.

(1) Prepare direct materials budgets for September and October.
(2) Prepare direct labor budgets for September and October.
(3) Prepare factory overhead budgets for September and October.

Jack & Mary Jones are married in December 30, 2018, they have no children or dependents. Their divorce became final on December 31, 2018. Of the Income earned, Jack’s total income is $500,000 but his taxable income is $425,000.  

1. What is Jack’s Filing Status for 2018?

2. What is their Marginal Tax Rate for 2018?

3. What is his Tax Liability for 2018?

4. What is his Average Tax Rate

5. What is his effective Tax Rate of taxable income?

6. If Jack discover he has an additional tax deduction of $40,000 what is his new Marginal Tax Rate?

7. What is his Tax Savings at the New Rate?

Ruiz Co. provides the following sales forecast for the next four months:

The company wants to end each month with ending finished goods inventory equal to 40% of next month's forecasted sales. Finished goods inventory on April 1 is 248 units. Assume July's budgeted production is 650 units. In addition, each finished unit requires five pounds (lbs.) of raw materials and the company wants to end each month with raw materials inventory equal to 30% of next month’s production needs. Beginning raw materials inventory for April was 978 pounds. Assume direct materials cost $5 per pound.

Prepare a direct materials budget for April, May, and June. (Round your intermediate calculations and final answers to the nearest whole dollar amount.)

Differential Analysis Report for Sales Promotion Proposal Rocket Shoe Company is planning a one-month campaign for August to promote sales of one of its two shoe products. A total of $105,000 has been budgeted for advertising, contests, redeemable coupons, and other promotional activities. The following data have been assembled for their possible usefulness in deciding which of the products to select for the campaign. Cross-Trainer Shoe Running Shoe Unit selling price $40 $44 Unit production costs: Direct materials $ (7) $(10) Direct labor (2) (3) Variable factory overhead (2) (2) Fixed factory overhead (4) (5) Total unit production costs $(15) $(20) Unit variable selling expenses (13) (12) Unit fixed selling expenses (7) (5) Total unit costs $(35) $(37) Operating income per unit $ 5 $ 7 No increase in facilities would be necessary to produce and sell the increased output. It is anticipated that 30,000 additional units of cross-trainer shoes or 25,000 additional units of running shoes could be sold without changing the unit selling price of either product. Required: 1. Prepare a differential analysis report presenting the additional revenue and additional costs anticipated from the promotion of cross-trainer shoes and running shoes. Rocket Shoe Company Proposals for Sales Promotion Campaign Differential Analysis Report Cross-Trainer Shoes Running Shoe Differential revenue from proposals $ $ Differential cost of proposals: Direct materials $ $ Direct labor Variable factory overhead Variable selling expenses Sales promotion expenses Differential cost of proposals $ $ Net differential income from proposed sales promotion campaign $ $

1. If a company were to choose one inventory valuation method in the current year, and then decide in the following year to change inventory valuation methods to a method that better approximates the company’s actual costs:
2. 1. Would this be accounted for as a change in accounting estimate or a change in accounting principle?   (Provide the Codification reference for your answer)
3. 2. Where is the Example provided in the Codification that illustrates the guidance for the retrospective application of a change from LIFO to FIFO (assuming it is practicable to determine the cumulative effect of the change for all prior years)?   (Provide the Codification reference for your answer)

2. ABC Company is a manufacturing company. Based on the criteria in the Codification, explain why each of the following items would or would not be included in Inventory Cost for ABC.   (Provide the Codification reference for your answer)
3. 1. Expenses incurred for marketing to sell ABC’s inventory
4. 2. General & administrative expenses incurred by ABC that are not clearly related to production
5. 3. Normal freight charges paid by ABC to its suppliers for inventory items purchased
6. 4. Abnormally high freight charges paid by ABC to its suppliers for inventory items purchased

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, $8,400; direct labor, $4,100; and overhead, $21,700.

Costs incurred during March in the Blending Department were: materials used, $44,000; direct labor, $17,300; and overhead cost applied to production, $102,000.

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, $676,000. (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, $662,000.
6. Units that were complete with respect to processing in the Blending Department were transferred to Finished Goods, $710,000.
7. Completed units were sold on account, $1,470,000. The Cost of Goods Sold was $680,000.

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.)

Marvel Parts, Inc., manufactures auto accessories. One of the company’s products is a set of seat covers that can be adjusted to fit nearly any small car. The company has a standard cost system in use for all of its products. According to the standards that have been set for the seat covers, the factory should work 1,075 hours each month to produce 2,150 sets of covers. The standard costs associated with this level of production are:

During August, the factory worked only 800 direct labor-hours and produced 2,500 sets of covers. The following actual costs were recorded during the month:

At standard, each set of covers should require 3.0 yards of material. All of the materials purchased during the month were used in production.

Required:

1. Compute the materials price and quantity variances for August.

2. Compute the labor rate and efficiency variances for August.

3. Compute the variable overhead rate and efficiency variances for August.

(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.)

Robert Perez is a contractor specializing in custom-built jacuzzis. On May 1, 2017, his ledger contains the following data.
Raw Materials Inventory $30,000 Work in Process Inventory 12,200 Manufacturing Overhead 2,500 (dr.) The Manufacturing Overhead account has debit totals of $12,500 and credit totals of $10,000.

Subsidiary data for Work in Process Inventory on May 1 include: Job Cost Sheets Job Manufacturing by Customer Direct Materials Direct Labor Overhead Stiner $2,500 $2,000 $1,400 Alton 2,000 1,200 840 Herman 900 800 560 $5,400 $4,000 $2,800

During May, the following costs were incurred: Raw materials purchased on account $4,000, Labor paid $7,000, and Manufacturing Overhead paid $1,400.

A summary of materials requisition slips and time tickets for the month of May reveals the following. Job by Customer Materials Requisition Slips Time Tickets Stiner $ 500 $ 400 Alton 600 1,000 Herman 2,300 1,300 Smith 1,900 2,300 5,300 5,000 General use 1,500 2,000 $6,800 $7,000

Overhead was charged to jobs on the basis of $0.70 per dollar of direct labor cost. The Jacuzzis for customers Stiner, Alton, and Herman were completed during May. The three Jacuzzis were sold for a total of $36,000.
Instructions (a) Prepare journal entries for the May transactions: (i) for purchase of raw materials, factory labor costs incurred, and manufacturing overhead costs incurred; (ii) assignment of raw materials, labor, and overhead to production; and completion of jobs and(iii) sale of goods. (iii) Post the entries to Work in Process Inventory. Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs. (MAKE A SHORT SCHEDULE FOR THIS.)

The accounting records of Wall’s China Shop reflected the following balances as of January 1, Year 3:

The following five transactions occurred in Year 3:

1. First purchase (cash): 125 units @ $96
2. Second purchase (cash): 195 units @ $104
3. Sales (all cash): 375 units @ $200
4. Paid $16,100 cash for salaries expense
5. Paid cash for income tax at the rate of 25 percent of income before taxes
   

Required
a. Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) LIFO cost flow, and (3) weighted-average cost flow. Compute the income tax expense for each method.
b. Use a vertical model to show the Year 3 income statement, balance sheet, and statement of cash flows under FIFO, LIFO, and weighted average. (Hint: Record the events under an accounting equation before preparing the statements.)

Use a vertical model to prepare the Year 3 statement of cash flows under FIFO, LIFO, and weighted average. (Do not round intermediate calculations. Round your answers to nearest whole dollar amount. Amounts to be deducted should be indicated with a minus sign.)