Equivalent Units Calculations—Weighted Average Method

Ferris Corporation makes a powdered rug shampoo in two sequential departments, Compounding and Drying. Materials are added at the beginning of the process in the Compounding Department. Conversion costs are added evenly throughout each process. Ferris uses the weighted average method of process costing. In the Compounding Department, beginning work in process was 12,000 pounds (70% processed), 111,000 pounds were started in process, 108,000 pounds transferred out, and ending work in process was 70% processed.

Calculate equivalent units for March 2016 for the Compounding Department.

Page 5-7 (Section 5-4a) of the text mentions “qualified tuition reduction plans” under which an educational institution may reduce or pay the tuition for its employees, and the employees will not be taxable on the assistance.

• What criteria are used to determine whether the employer qualifies to provide nontaxable qualified tuition reductions or payments under such a plan?
• Which individuals may receive the nontaxable qualified tuition reductions or payments?
• Are there circumstances in which a tuition reduction or payment made by a qualifying employer for a qualifying individual will nevertheless be taxable to the employee? If so, describe these circumstances.

Please answer each question in complete sentences, and cite the title and number of the IRS publication or form/instruction where you found each answer, and the page number on which the answer is found. Use your own words in the answer – do not copy the IRS’ language. Spelling and grammar count. This assignment is worth 5 points.

This assignment is due Tuesday, February 26, at 6 pm.

what is the sequence of the steps in the machine learning process

Watson Co. is a specialty fabrics manufacturer and retailer who operates mainly in the Carolinas. A partial trial balance showing Watson’s equity, revenue and expense balances as of its December 31, 2019 year-end follows:

    Debits              Credits

Dividends                                                                     $   321,960

Retained earnings (1/1/19)                                                                     $   859,265

Unrealized holding loss – ECM bonds (1/1/19)                      53,710

Interest revenue                                                                                         17,805

Sales revenue                                                                                        9,147,540

Advertising expense                                                           116,385

Cost of goods sold                                                         5,947,660

Depreciation expense                                                         241,195

Interest expense                                                                 108,470

Salaries and wages expense                                           1,859,255

Utilities expense                                                                212,090

In addition, the following information is available for the company for 2019. Unless indicated otherwise, this information has not yet been reflected in the company’s accounts. All of the dollar amounts are stated on a before-tax basis.

1. In early January 2016, Watson purchased certain equipment at a price of $81,750. Watson began depreciating the equipment using the straight-line method and estimates of 10 years for useful life and $16,350 for salvage value. Watson depreciated the equipment on this basis through 2018 (actually 2019 – see the Note below). In early January 2019, the company determined that its initial estimates needed to be revised. Watson increased the useful life from 10 to 15 years and decreased the salvage value from $16,390 to $5,250.

Note – Watson mistakenly computed depreciation on this equipment for 2019 using the original estimates (10 years and $16,350). The depreciation expense of $241,195 shown in the partial trial balance above reflects use of the original estimates for this equipment.

2. In March 2019, Watson extinguished bonds payable having a book value of $429,350. Watson paid the investors $392,675 to retire these bonds.

3. In November 2019, Watson discovered that it understated the sales revenue reported in its 2018 financial statements. As a result, the company’s 2018 sales revenue was understated by $74,290. Watson plans to record the correcting entry before year-end 2019 and report the correction as required by GAAP in its 2019 financial statements.

Note – The discovery and correction of the 2018 error will not change the sales revenue for 2019. The $9,147,540 figure in the partial trial balance above is correct.

4. In preparing its 2019 financial statements, Watson has determined that it must write down certain inventory items by a total of $46,310.

5. In 2015, Watson purchased bonds issued by ECM Co., which it continues to hold as an available-for-sale investment. The fair value of Watson’s investment increased in 2019, from $283,415 to $369,185.

Note – The $53,710 Unrealized holding loss – ECM bonds (1/1/19) in the partial trial balance above relates to this item and, of course, is stated net of income taxes.

6. In September 2019, the government of South Africa expropriated a manufacturing facility that Watson owned in the country. The South African government informed Watson that it does not intend to compensate the company for this action. Watson’s accounts show a book value for the manufacturing plant at the time of expropriation of $239,850. This event satisfies the conditions of unusual and infrequent.

7. At year-end 2019, Watson decided to change its inventory cost flow method from First-in, First-out (FIFO) to Average Cost. The effect of the change on 2019 and prior years is as follows:

     2019            Prior Years

Cost of goods sold – FIFO                                 $5,947,660        $14,732,000

Cost of goods sold – Average Cost                     6,081,390           15,316,000

Note – The cost of goods sold figure in Watson’s partial trial balance above reflects use of the old method (FIFO) for 2019.

8. In April 2019, Watson shifted its business strategy, resulting in the August 2019 sale of a component of the company considered a separate major line of business. The sale produced a loss on disposal of $71,920. The operations of the component, prior to the sale in August, produced an income of $22,070.

Assume the above amounts are material. Also, assume the income tax rate applicable to all years and all income items is 30%. Finally, note that Watson uses the multiple-step format for the reporting of income items and the two-income statement approach for the display of other comprehensive income items.

– Instructions –

Prepare the financial statements for the year ended December 31, 2019 to show the proper reporting of Watson’s:

Prepare an Income statement and retained earnings statement from the informantion above.

Prepare these statements in good form, according to GAAP requirements.

Question 2 Topic: Leases (for lessees) Answer both parts independently of each other.

Part A Supply Ltd entered into a non-cancellable five-year lease arrangement with Customer Ltd on 1 July 2019. The lease is for an item of machinery. There are to be five annual payments of $315 000, the first being made on 30 June 2020. The implicit interest rate is 12%. The Machinery is expected to have an economic life of six years, after which time it will have an expected residual value of $210 000. There is a bargain purchase option that Customer Ltd will be able to exercise at the end of the fifth year for $280 000. Customer Ltd determined that this contract contains a lease.

REQUIRED: Prepare the journal entries in the books of the lessee (Customer Ltd) from 1 July 2019 to 30 June 2020 (the end of the reporting period). Show all working.

Part B Customer Ltd enters into a 10-year contract with Supplier Ltd for the right to use two specified physically distinct dark fibres within a larger cable connecting Hong Kong to Tokyo. Customer Ltd makes the decisions about the use of the fibres by connecting each end of the fibres to its electronic equipment (i.e., Customer ‘light’ the fibres and decides what data and how much data to transfer). If the fibres are damaged, Supplier Ltd is responsible for the repairs and maintenance. Supplier Ltd owns extra fibres but can substitute those for Customer Ltd’s fibres only for reasons of repairs, maintenance or malfunction.

REQUIRED: Determine whether the contract contains a lease. Please explain and justify your conclusion according to AASB 16.

Deductible expenses for a service member’s moving do not include:

a. the cost of transporting household goods

b. Hotel Cost while moving to the new locations

c. Meals Incurred during the move

d. storage of household goods for a limited time upon arrival at the new location

Identifying Operating and Nonrecurring Income Components

Following is the The Dow Chemical Company income statement.

equired

a. Identify the components in its statement that you would consider operating.
b. Identify those components that you would consider nonrecurring.

c. Compute net operating profit after taxes (NOPAT) and net operating profit margin (NOPM) for each year.
Assume a statutory tax rate of 35%.

I can't get NoPat right...someone already answered this question on chegg but the answer for Nopat is wrong. please help.

Prepare journal entries for a local government to record the following transactions, first for fund financial statements and then for government-wide financial statements.

A.The government sells $900,000 in bonds at face value to finance construction of a warehouse.

B. A $1.1 million contract is signed for construction of the warehouse. The commitment is required, if allowed.

C. A $130,000 transfer of unrestricted funds was made for the eventual payment of the debt in (a).

D. Equipment for the fire department is received with a cost of $12,000. When it was ordered, an anticipated cost of $11,800 had been recorded.

E. Supplies to be used in the schools are bought for $2,000 cash. The consumption method is used.

F. A state grant of $90,000 is awarded to supplement police salaries. The money will be paid to reimburse the government after the supplement payments have been made to the police officers.

G.Property tax assessments are mailed to citizens of the government. The total assessment is $600,000, although officials anticipate that 4 percent will never be collected. There is an enforceable legal claim for this money and the government can use it immediately.

On 1/1/2001, ABC Co. issued $1,000,000 5-year bonds with a market rate of 8%. Interests are paid annually on 12/31. The coupon rate is 6%. Answer the following questions assuming that the company uses the effective interest method of amortization. Show your calculations. 1. Determine the selling price of the bond on the issue date. Is it issued at a premium or discount? 2. Give the journal entry to record the bond issuance above. 3. How much is the interest expense for ABC Co. for the fiscal year that ended 12/31/2001? Give the journal entry to record the interest expense. 4 . On 1/1/2003, ABC Co. found itself with a lot of excess cash and it will be best for them to buy back their bonds from the open market and retire them so as to avoid future interest payments. The market interest rate on 1/1/2003 is 9%. Calculate: (i) the cash amount that ABC has to pay to retire the bond (ii) the book value (i.e., net borrowing) of the bonds on 1/1/2003 (iii) gain/loss from the retirement (iv) provide the journal entry for the early retirement of bonds.

Fill in the missing amounts in each of the eight case situations below. Each case is independent of the others. (Hint: One way to find the missing amounts would be to prepare a contribution format income statement for each case, enter the known data, and then compute the missing items.)

Required:

a. Assume that only one product is being sold in each of the four following case situations:

b. Assume that more than one product is being sold in each of the four following case situations:

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Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions

Required:
1. Compute cost of goods available for sale and the number of units available for sale.

2. Compute the number of units in ending inventory.

3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, units sold consist of 600 units from beginning inventory, 380 from the February 10 purchase, 120 from the March 13 purchase, 130 from the August 21 purchase, and 205 from the September 5 purchase.

4. Compute gross profit earned by the company for each of the four costing methods. (Round your average cost per unit to 2 decimal places.)

5. The company’s manager earns a bonus based on a percent of gross profit. Which method of inventory costing produces the highest bonus for the manager?

Lamp Light Company maintains and repairs warning lights, such as those found on radio towers and lighthouses. Lamp Light Company prepared the following end-of-period spreadsheet at December 31, 2018, the end of the fiscal year:

Required:

Vibrant Company had $980,000 of sales in each of Year 1, Year 2, and Year 3, and it purchased merchandise costing $540,000 in each of those years. It also maintained a $280,000 physical inventory from the beginning to the end of that three-year period. In accounting for inventory, it made an error at the end of Year 1 that caused its Year 1 ending inventory to appear on its statements as $260,000 rather than the correct $280,000.

Required:
1. Determine the correct amount of the company’s gross profit in each of Year 1, Year 2, and Year 3.
2. Prepare comparative income statements to show the effect of this error on the company's cost of goods sold and gross profit for each of Year 1, Year 2, and Year 3.