The following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for the year ended December 31, 2018 ($ in 000s): sales revenue, $18,300; cost of goods sold, $7,700; selling expenses, $1,450; general and administrative expenses, $950; interest revenue, $230; interest expense, $320. Income taxes have not yet been recorded. The company’s income tax rate is 20% on all items of income or loss. These revenue and expense items appear in the company’s income statement every year. The company’s controller, however, has asked for your help in determining the appropriate treatment of the following nonrecurring transactions that also occurred during 2018 ($ in 000s). All transactions are material in amount.

1. Investments were sold during the year at a loss of $370. Schembri also had unrealized gains of $470 for the year on investments.
2. One of the company’s factories was closed during the year. Restructuring costs incurred were $1,800.
3. During the year, Schembri completed the sale of one of its operating divisions that qualifies as a component of the entity according to GAAP. The division had incurred a loss from operations of $710 in 2018 prior to the sale, and its assets were sold at a gain of $1,700.
4. In 2018, the company’s accountant discovered that depreciation expense in 2017 for the office building was understated by $350.
5. Negative foreign currency translation adjustment for the year totaled $420.

Required:
1. Prepare Schembri’s single, continuous multiple-step statement of comprehensive income for 2018, including earnings per share disclosures. One million shares of common stock were outstanding at the beginning of the year and an additional 200,000 shares were issued on July 1, 2018.
2. Prepare a separate statement of comprehensive income for 2018.
  

The Kollar Company has a defined benefit pension plan. Pension information concerning the fiscal years 2018 and 2019 are presented below ($ in millions): Information Provided by Pension Plan Actuary: Projected benefit obligation as of December 31, 2017 = $3,500. Prior service cost from plan amendment on January 2, 2018 = $700 (straight-line amortization for 10-year average remaining service period). Service cost for 2018 = $660. Service cost for 2019 = $710. Discount rate used by actuary on projected benefit obligation for 2018 and 2019 = 10%. Payments to retirees in 2018 = $520. Payments to retirees in 2019 = $590. No changes in actuarial assumptions or estimates. Net gain—AOCI on January 1, 2018 = $380. Net gains and losses are amortized for 10 years in 2018 and 2019. Information Provided by Pension Fund Trustee: Plan asset balance at fair value on January 1, 2018 = $2,500. 2018 contributions = $680. 2019 contributions = $730. Expected long-term rate of return on plan assets = 12%. 2018 actual return on plan assets = $230. 2019 actual return on plan assets = $280. Required: 1. Calculate pension expense for 2018 and 2019. 2. Prepare the journal entries for 2018 and 2019 to record pension expense. 3. Prepare the journal entries for 2018 and 2019 to record any gains and losses and new prior service cost. 4. Prepare the journal entries for 2018 and 2019 to record the cash contribution to plan assets and benefit payments to retirees.

The following balance sheet is for a local partnership in which the partners have become very unhappy with each other.

To avoid more conflict, the partners have decided to cease operations and sell all assets. Using this information, answer the following questions. Each question should be viewed as an independent situation related to the partnership’s liquidation.

1. The $10,000 cash that exceeds the partnership liabilities is to be disbursed immediately. If profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 2:3:3:2 basis, respectively, how will the $10,000 be divided?
2. The $10,000 cash that exceeds the partnership liabilities is to be disbursed immediately. If profits and losses are allocated on a 2:2:3:3 basis, respectively, how will the $10,000 be divided?
3. The building is immediately sold for $95,000 to give total cash of $145,000. The liabilities are then paid, leaving a cash balance of $105,000. This cash is to be distributed to the partners. How much of this money will each partner receive if profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:3:3 basis, respectively? (Do not round intermediate calculations.)
4. Assume that profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:4:2 basis, respectively. How much money must the firm receive from selling the land and building to ensure that Carvil receives a portion? (Do not round intermediate calculations.)

1. Given a random list of accounts with their normal balances, prepare a trial balance for Luxury Gifts Corporation as of December 31, 2019

Common stock        $5,500                    Accounts Receivable         $2,000

Note Payable 3,500                    Service Revenue               12,000

Supplies                       500                    Insurance Expense                 700

Prepaid Insurance   1,400                    Equipment                        9,500

Salary Expense       8,000                    Accounts Payable              1,000

Dividends                2,000                    Cash                                1,000

Utilities Expense      1,000                    Retained Earnings             4,100

2. Prepare Journal Entries in good form for the following transactions for the Goodland Company

1. The owner invested cash of $14,000 and office equipment valued at $6,500 into the business and received common stock in exchange

2. Supplies were purchase on account for $1,000

3. Payment of $750 was made for one month’s rent on the store

4. A client was billed 1,500 for services rendered

5. The company declared and paid a cash dividend of $300

3. Analyze the following transactions. Indicate which accounts are affected and whether they will increase or decrease.

1. Owner investment of cash into the business
2. Payment of a utility bill
3. Purchase of inventory for cash
4. Payment of an accounts payable
5. Performing a service on account
6. Collecting cash from a customer as payment on his account

EMD Corporation manufactures two products, Product S and Product W. Product W is of fairly recent origin, having been developed as an attempt to enter a market closely related to that of Product W. Product W is the more complex of the two products, requiring 3 hours of direct labor time per unit to manufacture compared to 2 hour of direct labor time for Product S. Product W is produced on an automated production line. Overhead is currently assigned to the products on the basis of direct-labor-hours. The company estimated it would incur $1,139,421 in manufacturing overhead costs and produce 15,000 units of Product W and 75,000 units of Product S during the current year. Unit cost for materials and direct labor are: Product S Product W Direct material $ 17 $ 24 Direct labor 11 13 Required: a-1. Compute the predetermined overhead rate under the current method of allocation. a-2. Determine the unit product cost of each product for the current year. b. The company's overhead costs can be attributed to four major activities. These activities and the amount of overhead cost attributable to each for the current year are given below: Total Activity Activity Cost Pool Total Cost Product S Product W Total Machine setups required $ 643,440 1,590 2,240 3,830 Purchase orders issued 58,266 555 192 747 Machine-hours required 221,640 7,760 10,710 18,470 Maintenance requests issued 216,075 736 939 1,675 $ 1,139,421 Using the data above and an activity-based costing approach, determine the unit product cost of each product for the current year Req A1Req A2Req B Compute the predetermined overhead rate under the current method of allocation. (Round your answer to 2 decimal places.) Predetermined overhead rate per DLH Determine the unit product cost of each product for the current year. (Round your answers to 2 decimal places.) Unit Product Cost Product S Product W Using the data above and an activity-based costing approach, determine the unit product cost of each product for the current year. (Round your answer to 2 decimal places.) Unit Product Cost Product S Product W Using the data above and an activity-based costing approach, determine the unit product cost of each product for the current year. (Round your answer to 2 decimal places.) Unit Product Cost Product S Product W

Using the data above and an activity-based costing approach, determine the unit product cost of each product for the current year. (Round your answer to 2 decimal places.)

Desilets Corporation has provided the following data from its activity-based costing accounting system: Supervisory wages $ 85,600 Factory utilities $ 306,000 Distribution of Resource Consumption across Activity Cost Pools: Activity Cost Pools Batch Set-Ups Unit Processing Other Total Supervisory wages 60 % 37 % 3 % 100 % Factory utilities 29 % 63 % 8 % 100 % The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products. Required: a. Determine the total amount of supervisory wages and factory utilities costs that would be allocated to the Unit Processing activity cost pool. b. Determine the total amount of supervisory wages and factory utilities costs that would NOT be assigned to products. Determine the total amount of supervisory wages and factory utilities costs that would NOT be assigned to products. Unassigned Costs Supervisory wages Factory utilities

Q1. Differentiate between fundamental qualities and enhancing qualities for qualitative characteristics of financial information, give examples.

Q2. Both the unadjusted trial balance and adjusted trial balance for Smith Corporation on December 31, 2013, are listed below:

Required: Prepare the five adjusting entries required at December 31, 2013.

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows:

During November, the following activity was recorded related to the production of Fludex:

1. Materials purchased, 12,500 ounces at a cost of $305,625.

2. There was no beginning inventory of materials; however, at the end of the month, 2,800 ounces of material remained in ending inventory.

3. The company employs 21 lab technicians to work on the production of Fludex. During November, they each worked an average of 150 hours at an average pay rate of $12.00 per hour.

4. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $4,200.

5. During November, the company produced 4,200 units of Fludex.

Required:

1. For direct materials:

a. Compute the price and quantity variances.

b. The materials were purchased from a new supplier who is anxious to enter into a long-term purchase contract. Would you recommend that the company sign the contract?

2. For direct labor:

a. Compute the rate and efficiency variances.

b. In the past, the 21 technicians employed in the production of Fludex consisted of 4 senior technicians and 17 assistants. During November, the company experimented with fewer senior technicians and more assistants in order to reduce labor costs. Would you recommend that the new labor mix be continued?

3. Compute the variable overhead rate and efficiency variances.

A&K Corporation was established in 2016. A&K has authorized 50,000 shares of common stock, par value $1 per share, and 10,000 authorized shares of 9% preferred stock, par value $20 per share. Net Income for 2016 was $245,000. The following transactions took place during 2016: January 1 Issued 40,000 shares of common stock for cash at $30 per share. February 1 Issued 7,000 shares of preferred stock for cash of $60 per share. June 1 Repurchased 8,000 shares of L&D common stock at $25 per share. August 1 Reissued 1,000 shares of the treasury stock at $26 per share. December 1 Declared cash dividends on Common Stock only totaling $65,000 to be paid on January 15, 2017 to owners on record as of December 31, 2016. Required: Please show calculations a)Prepare journal entries for each of the above transactions. b) Calculate Ending Retained Earnings c.)Prepare the Stockholders' Equity section of the Balance Sheet in good format.

Halogen Laminated Products Company began business on January 1, 2018. During January, the following transactions occurred: Jan. 1 Issued common stock in exchange for $118,000 cash. 2 Purchased inventory on account for $27,000 (the perpetual inventory system is used). 4 Paid an insurance company $1,440 for a one-year insurance policy. 10 Sold merchandise on account for $11,200. The cost of the merchandise was $6,200. 15 Borrowed $22,000 from a local bank and signed a note. Principal and interest at 10% is to be repaid in six months. 20 Paid employees $5,200 salaries and wages for the first half of the month. 22 Sold merchandise for $9,200 cash. The cost of the merchandise was $5,200. 24 Paid $14,200 to suppliers for the merchandise purchased on January 2. 26 Collected $5,600 on account from customers. 28 Paid $1,000 to the local utility company for January gas and electricity. 30 Paid $3,200 rent for the building. $1,600 was for January rent, and $1,600 for February rent. Required: 1. Prepare general journal entries to record each transaction. 2. Post the transactions into the appropriate T-accounts. 3. Prepare an unadjusted trial balance as of January 30, 2018.

Q- Emilie has a maintenance contract with a life insurance company to shovel snow,
mow lawns, and maintain fences. She has agreed to keep the premises neat, in good
repair, and easily accessible for employees and customers. She uses her own small
tools and snow plow, but the lawn mower and snow blower are owned by the
company. She has other contracts with organizations in the same area and, if
necessary, sub-contracts the work out, depending on the weather conditions. Her
contact at the site is the manager of Accounts Payable (AP) and she is paid a fixed
amount each month by cheque, according to the contract she has signed with the
company.

Is Emilie an employee of the life insurance company? Write a memo, in proper
memo format, to the manager of Accounts Payable, explaining your response.

Present Value. Use a calculator for each of these problems.

(a) You are moving to Bozeman and you are going to stay here forever. You would like to find an apartment. You can either buy it or rent it. The monthly rent is $500 and the monthly interest rate is 0.1%. Alternatively, you can purchase the apartment, paying $600,000. How are you going to finance your new accommodation? Argue using the PV formula.

(b) You take a loan to buy a car that costs $4000. What is your monthly payment if you want to pay back the loan after 3 years (36 payments) and the monthly interest rate is 0.5%. (Hint: think annuity)

(c) You are hired by Merrill Lynch to help assess the value of a T-bond (a bond issued by the Treasury Department) with the face value F=$1000, coupon c = $100 (paid anually until T − 1 and face value F paid at time T) and time to maturity equal to T = 10 years. The interest rate is equal to r = 10%. Find the PV of such a bond. Is it a good or bad deal to buy such a bond for $900? Explain.

(d) You want to receive $40,000 per year when retired (you will be retired from 61-80). How much do you have to save between 21-60 years if the interest rate is 5%?

(e) You save $20,000 per year when working and plan to work from 21-60. How much will you consume per year when you retire? Assume you will be retired from 61-80. The interest rate is 5%.

In a page, explain the similarities and differences between job costing and process costing methods in a manufacturing environment, and construct and use operational budgets for a manufacturing company.

Andretti Company has a single product called a Dak. The company normally produces and sells 90,000 Daks each year at a selling price of $54 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 112,500 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 90,000 units each year if it were willing to increase the fixed selling expenses by $100,000. What is the financial advantage (disadvantage) of investing an additional $100,000 in fixed selling expenses?

1-b. Would the additional investment be justified?

2. Assume again that Andretti Company has sufficient capacity to produce 112,500 Daks each year. A customer in a foreign market wants to purchase 22,500 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $4.70 per unit and an additional $15,750 for permits and licenses. The only selling costs that would be associated with the order would be $2.60 per unit shipping cost. What is the break-even price per unit on this order?

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 is the unit cost figure that is relevant for setting a minimum selling price?

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 30% of their normal level during the two-month period and the fixed selling expenses would be reduced by 20% during the two-month period.

a. How much total contribution margin will Andretti forgo if it closes the plant for two months?

b. How much total fixed cost will the company avoid if it closes the plant for two months?

c. What is the financial advantage (disadvantage) of closing the plant for the two-month period?

d. Should Andretti close the plant for two months?

5. An outside manufacturer has offered to produce 90,000 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. What is Andretti’s avoidable cost per unit that it should compare to the price quoted by the outside manufacturer?