Betty DeRose, Inc. operates two departments, the handling department and
the packaging department. During April, the handling department reported
the following information:

                                           % complete      % complete
                                units         DM           conversion 
work in process, April 1        18,000        38%             71%
units started during April      80,000
work in process, April 30       44,000        82%             47%

The cost of beginning work in process and the costs added during April
were as follows:

                                 DM         Conversion       Total cost
work in process, April 1      $ 51,764       $152,477         $204,241
costs added during April       191,452        232,125          423,577
total costs                    243,216        384,602          627,818

Calculate the conversion unit cost using the weighted average process
costing method.

Special Place, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter:

1. Budgeted monthly absorption costing income statements for April–July are:

*Includes $15,000 of depreciation each month.

2. Sales are 20% for cash and 80% on account.

3. Sales on account are collected over a three-month period with 10% collected in the month of sale; 70% collected in the first month following the month of sale; and the remaining 20% collected in the second month following the month of sale. February’s sales totaled $155,000, and March’s sales totaled $215,000.

4. Inventory purchases are paid for within 15 days. Therefore, 50% of a month’s inventory purchases are paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable at March 31 for inventory purchases during March total $91,700.

5. Each month’s ending inventory must equal 20% of the cost of the merchandise to be sold in the following month. The merchandise inventory at March 31 is $63,000.

6. Dividends of $23,000 will be declared and paid in April.

7. Land costing $31,000 will be purchased for cash in May.

8. The cash balance at March 31 is $45,000; the company must maintain a cash balance of at least $40,000 at the end of each month.

9. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $200,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter

The company’s president is interested in knowing how reducing inventory levels and collecting accounts receivable sooner will impact the cash budget. He revises the cash collection and ending inventory assumptions as follows:

1. Sales continue to be 20% for cash and 80% on credit. However, credit sales from April, May, and June are collected over a three-month period with 25% collected in the month of sale, 65% collected in the month following sale, and 10% in the second month following sale. Credit sales from February and March are collected during the second quarter using the collection percentages specified in the main section.

2. The company maintains its ending inventory levels for April, May, and June at 15% of the cost of merchandise to be sold in the following month. The merchandise inventory at March 31 remains $63,000 and accounts payable for inventory purchases at March 31 remains $91,700.

Required:

1. Using the president’s new assumptions in (a) above, prepare a schedule of expected cash collections for April, May, and June and for the quarter in total.

2. Using the president’s new assumptions in (b) above, prepare the following for merchandise inventory:

a. A merchandise purchases budget for April, May, and June.

b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June and for the quarter in total.

3. Using the president’s new assumptions, prepare a cash budget for April, May, and June, and for the quarter in total.

C. Clean-All, Inc. sells washing machines with a 3-year assurance type warranty. In the past, Clean-All has found that in the year after the sale, warranty costs have been 3% of sales; in the second year after sale, 5% of sales; and in the third year after sale, 7% of sales. the following data are also available:

Year Sales Warranty Expenditures

2018 650,000 82,000

2019 700,000 85,000

Instructions:

1. Prepare the journal entries for the preceding transactions for 2018-2019. Closing entries are not required.

2. Determine the amount Clean-All will report as liability on December 31, 2019, assuming the liability had a balance of $101,200 on December 31, 2017.

The shareholders’ equity section of the balance sheet of TNL Systems Inc. included the following accounts at December 31, 2017: Shareholders' Equity ($ in millions) Common stock, 300 million shares at $1 par $ 300 Paid-in capital—excess of par 2,400 Paid-in capital—share repurchase 2 Retained earnings 2,000 Required: 1. During 2018, TNL Systems reacquired shares of its common stock and later sold shares in two separate transactions. Prepare the entries for both the purchase and subsequent resale of the shares assuming the shares are (a) retired and (b) viewed as treasury stock. A) On February 5, 2018, TNL Systems purchased 7 million shares at $12 per share.B) On July 9, 2018, the corporation sold 3 million shares at $14 per share. C)On November 14, 2020, the corporation sold 3 million shares at $9 per share. 2. Prepare the shareholders’ equity section of TNL Systems’ balance sheet at December 31, 2020, comparing the two approaches. Assume all net income earned in 2018–2020 was distributed to shareholders as cash dividends.

The YTM on a bond is the interest rate you earn on your investment if interest rates don’t change. If you actually sell the bond before it matures, your realized return is known as the holding period yield (HPY). a. Suppose that today you buy a bond with an annual coupon rate of 12 percent for $1,070. The bond has 12 years to maturity. What rate of return do you expect to earn on your investment? Assume a par value of $1,000. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b-1. Two years from now, the YTM on your bond has declined by 1 percent, and you decide to sell. What price will your bond sell for? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b-2. What is the HPY on your investment? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

a.Expected rate of return%?

b-1.Bond price?

b-2.HPY%?

Warner Clothing is considering the introduction of a new baseball cap for sales by local vendors. The company has collected the following price and cost characteristics:

Required:

a. What number must Warner sell per month to break even?

b. What number must Warner sell per month to make an operating profit of $34,000?

Assume that the company plans to sell 9,000 units per month. Consider requirements (b), (c), and (d) independently of each other.

Required:

a. What will be the operating profit?

b. What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent?

c. What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent?

d. Suppose that fixed costs for the year are 20 percent lower than projected, and variable costs per unit are 20 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much?

A partially completed pension spreadsheet showing the relationships among the elements that comprise the defined benefit pension plan of Universal Products is given below. The actuary's discount rate is 5%. At the end of 2019, the pension formula was amended, creating a prior service cost of $100,000. The expected rate of return on assets was 8%, and the average remaining service life of the active employee group is 20 years in the current year as well as the previous two years.

Required:
Fill in the missing amounts. (Enter your answers in thousands rounded to 1 decimal place.)

How can the activity rates (i.e.cost per activity) for the various activities be used to target process improvement? Give examples to support your position.

The following is the balance sheet and income statement for Metro Eagle Outfitters, in condensed form, plus some information from the cash flow statement.

Required:

Calculate the following liquidity ratios for Metro Eagle in 2018 and 2019:

1. Inventory turnover

2. Current ratio.

3. Quick ratio

4. Cash flow ratio

Generally, we do not expect the amount in the client’s accounting system for a cash account (e.g., operating cash balance as of 12/31/18 = $508,219.33) to match the amount that the financial institution confirms (e.g., “our records show that your client’s 12/31/18 bank account was $478,921.54). Why do we generally not expect the financial institutions to confirm the exact amount reported in the client’s accounting system? Another way of asking this question is: Why are there reconciling differences between the client and financial institution’s records?

DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating its suppliers and moving toward Lean Production. Many adjustment problems have been encountered, including problems relating to performance measurement. After much study, the company has decided to use the performance measures below, and it has gathered data relating to these measures for the first four months of operations.

Management has asked for your help in computing throughput time, delivery cycle time, and MCE. The following average times have been logged over the last four months:

Required:

1-a. Compute the throughput time for each month.

1-b. Compute the delivery cycle time for each month.

1-c. Compute the manufacturing cycle efficiency (MCE) for each month.

2. Evaluate the company’s performance over the last four months.

3-a. Refer to the move time, process time, and so forth, given for month 4. Assume that in month 5 the move time, process time, and so forth, are the same as in month 4, except that through the use of Lean Production the company is able to completely eliminate the queue time during production. Compute the new throughput time and MCE.

3-b. Refer to the move time, process time, and so forth, given for month 4. Assume in month 6 that the move time, process time, and so forth, are again the same as in month 4, except that the company is able to completely eliminate both the queue time during production and the inspection time. Compute the new throughput time and MCE.

-a. Compute the throughput time for each month.
1-b. Compute the delivery cycle time for each month.
1-c. Compute the manufacturing cycle efficiency (MCE) for each month.

(Round your intermediate calculations and final answers to 1 decimal place.)

Show less

Evaluate the company’s performance over the last four months. (Indicate the effect of each trend by selecting "Favorable" or  "Unfavorable" or "None" for no effect (i.e., zero variance).

3-a. (Month 5) Refer to the move time, process time, and so forth, given for month 4. Assume that in month 5 the move time, process time, and so forth, are the same as in month 4, except that through the use of Lean Production the company is able to completely eliminate the queue time during production. Compute the new throughput time and MCE.

3-b. (Month 6) Refer to the move time, process time, and so forth, given for month 4. Assume in month 6 that the move time, process time, and so forth, are again the same as in month 4, except that the company is able to completely eliminate both the queue time during production and the inspection time. Compute the new throughput time and MCE.

(Round your intermediate calculations and final answers to 1 decimal place.)

Compose a memo addressing the allocation of profits to three partners of a new business: Alan, Bob, and Carol. It's your responsibility to address the potential ways in which the first-year profits can be divided among these partners, including whether the partners should be taking a salary, how the partners' capital accounts may be affected by various decisions, and the most ethical way that the profits could be divided.

The memo should answer the following prompt: A new business client comes to your office. There are three owners of the business. The three individuals, Alan, Bob, and Carol, are thinking about forming a partnership. Alan is only investing $1 million in cash. He will not have anything to do with the daily activities of the business. Bob has had some experience in the business and will be responsible for the day-to-day operations of the business. Carol has a great deal of experience and many contacts within the business. She will be responsible for attracting new clients. Neither Bob nor Carol are investing cash into the partnership. During the first year of operation, the partnership generated a profit of $150,000. None of the partners received distributions during the year.

Specifically, the following critical elements must be addressed:

I. Allocation of Profits
    
     A. Explain how allocating the profits evenly between the partners would work. Consider the fairness to each of the partners in your response.
     B. What would be the value of each partner's capital account at the end of the year, given that the profits were allocated evenly among the three? Support your answer with quantitative data and an explanation of how you came to this conclusion.
     C. Explain an alternative method of allocating the profits if 80% of the profits was given to the cash investor and the remaining amount was split evenly between the other two partners.
     D. What would be the value of each partner's capital account at the end of the year, given this alternative allocation method? Support your answer with quantitative data and an explanation of how you came to this conclusion.

II. Payment of Salary

     A. Should the two partners who are working in the business receive a salary? Why or why not? Be sure to support your decision with research and quantitative data.
     B. If the two non-investors did receive a salary, how would their capital account be affected? How would this impact a potential future liquidation or buyout? Be sure to thoroughly explain and support your answer.
     C. Should the cash investor receive a higher share of the profits or other sharing options? Why or why not? Support your opinions with research and quantitative data.
     D. If the cash investor did receive a salary, how would his capital account be affected? How would this impact a potential future liquidation or buyout? Be sure to thoroughly explain and support your answer.
     E. How do the payment of salary and the allocation of profit affect entries and the financial bottom line? Be sure to support your explanation with concrete examples.
     F. How could the payment of salary and allocation of profit be a more effective method of splitting the company's profits for the three partners? Explain a scenario in which the three partners would all be compensated fairly, and support your answer with logical reasoning.
     G. What would be the value of each partner's capital account at the end of the year, given your proposed fair allocation method? Support your answer with quantitative data and an explanation of how you came to this conclusion.

give a couple of brief example of what management can do to establish a positive control environment and why this is important to do also how can such things be properly communicated and /or enforced by management within a company among employees

The annual data that follows pertain to

ShadyShady​,

a manufacturer of swimming goggles​ (the company had no beginning​ inventory):

LOADING...

​(Click the icon to view the​ data.)

Requirements

Gazam  corporations adjusted trial balance at December 31, 20x6 included the following

Cash                                                                                        26,000

Account receivable                                                                 50,000

Allowance for doubtful account                                                                     5,000

Merchandise inventory                                                          41,000

Land                                                                                        50,000

Equipment                                                                              96,000

Accumulated depreciation                                                                             16,000

Account payable 115000

Income taxes payable                                                                                     5,000

Unearned rent                                                                                                15,000

Common stock ($10 par 10,000 shares)                                                       150,000

Retained earnings                                                                                           60,000

Sales                                                                                                                90,000

Interest revenue                                                                                             4,000

Cost of goods sold                                                                  90,000

Selling expense                                                                       30,000

Administrative expense                                                          40,000

Income tax expense                                                                12,000

Loss on sale of equipment                                                      10,000

Dividends declared                                                                 15,000

                                                                                                460,000           460,000

Prepare a balance sheet at December 31, 20x6, in good form.