The Hope Co. sells direct to retail customers and also
to wholesalers. On January,
1, 2018 the balance of the retail accounts receivable was P418,000
while the allowance for bad debts with
respect to retail customers was a credit of P15,200.
The following summary pertains only to retail sales since
2015
Credit Sales - Bad Debts Written off - Bad Debts Recoveries
2015 - P2,220,000 P52,000 P4,300
2016 - 2,450,000 59,000 7,500
2017 - 2,930,000 60,000 7,200
2018 - 3,000,000 62,000 8,400
Bad debts are provided for as a percentage of credit sates. The
accountant calculates the percentage annually
by using the experience of the three years prior to the current
year. The formula is bad debts written off less
recoveries expressed as a percentage of the credit sales for the
same period. Total collections from customers
amounted to P2,760,40. This amount included P50,000 for which the
goods are to be delivered next year. During
the year. The company recorded the bad debts written off as bad
debts expense
Based on the above and the result of your audit, answer the
following:
1. The percentage to be used to compute the allowance for bad debt
on December 31,2018 is
2. How much is the doubtful accounts expense for 2018?
3. The doubtful accounts expense for 2018 is overstated by
4. The ledger balance of the accounts receivable after necessary
adjust on December 31, 2018 was a debit of
5. The ledger balance of the allowance for bad debts after
necessary adjustments on December 31, 2018 was
a credit of
In: Accounting
Basil has $123,000 AGI (before any rental loss). He also owns several rental properties in which he actively participates. The rental properties produced a $36,550 loss in the current year. How much, if any, of the rental loss can Basil deduct in the current year?
In: Accounting
|
Hielta Oy, a Finnish company, processes wood pulp for various manufacturers of paper products. Data relating to tons of pulp processed during June are provided below: |
|
Percent Completed |
|||
| Tons of Pulp | Materials | Labor and Overhead | |
| Work in process, June 1 | 81,700 | 82% | 25% |
| Work in process, June 30 | 51,900 | 46% | 17% |
| Started into production during June | 300,600 | ||
| Required: |
| 1. |
Compute the number of tons of pulp completed and transferred out during June. |
| 2. | Compute the equivalent units of production for materials and for labor and overhead for June. |
In: Accounting
1. True___False___ The issuance of Common Stock produces Sales (or Revenue) for a corporation.
2. True___False___ The issuance of Common Stock produces a profit for a corporation.
3. True___False___ Dollar amounts on a Balance Sheet are valid only for a single date.
4. True___False___ An Income Statement provides information about a company’s performance.
5. True___False___ A Journal entry always consists of at least one Debit and one Credit.
6. True___False___ The Journal provides a chronological record of a company’s transactions.
In: Accounting
|
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): |
| 2016 | 2015 | |||
| Sales | $ | 4,700,000 | $ | 3,800,000 |
| Cost of goods sold | 2,920,000 | 2,060,000 | ||
| Administrative expenses | 860,000 | 735,000 | ||
| Selling expenses | 420,000 | 372,000 | ||
| Interest revenue | 156,000 | 146,000 | ||
| Interest expense | 212,000 | 212,000 | ||
| Loss on sale of assets of discontinued component | 74,000 | — | ||
|
On July 1, 2016, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by GAAP. The assets of the component were sold on September 30, 2016, for $74,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows: |
| 1/1/16-9/30/16 | 2015 | ||||||
| Sales | $ | 460,000 | $ | 560,000 | |||
| Cost of goods sold | (320,000 | ) | (356,000 | ) | |||
| Administrative expenses | (56,000 | ) | (46,000 | ) | |||
| Selling expenses | (26,000 | ) | (36,000 | ) | |||
| Operating income before taxes | $ | 58,000 | $ | 122,000 | |||
|
In addition to the account balances above, several events occurred during 2016 that have not yet been reflected in the above accounts: |
|
| 1. |
A fire caused $56,000 in uninsured damages to the main office building. The fire was considered to be an infrequent but not unusual event. |
| 2. |
Inventory that had cost $46,000 had become obsolete because a competitor introduced a better product. The inventory was sold as scrap for $6,000. |
| 3. | Income taxes have not yet been recorded. |
| Required: |
|
Prepare a multiple-step income statement for the Reed Company for 2016, showing 2015 information in comparative format, including income taxes computed at 20% and EPS disclosures assuming 500,000 shares of common stock. (Amounts to be deducted should be indicated with a minus sign. Round EPS answers to 2 decimal places.) |
In: Accounting
|
Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 3,700 helmets, using 2,368 kilograms of plastic. The plastic cost the company $17,997. |
|
According to the standard cost card, each helmet should require 0.54 kilograms of plastic, at a cost of $8.00 per kilogram. |
| Required: | |
| 1. |
According to the standards, what cost for plastic should have been incurred to make 3,700 helmets? How much greater or less is this than the cost that was incurred? (Round Standard kilograms of plastic per helmet to 2 decimal places.) |
| 2. |
Break down the difference computed in (1) above into a materials price variance and a materials quantity variance. (Round your actual materials price to two decimal places, and round your final answers to the nearest whole dollar. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) |
In: Accounting
The Brookstone Company produces 9 volt batteries and AAA batteries. The Brookstone Company uses a plantwide rate to apply overhead based on direct labor hours. The following data is given:
| Actual Overhead | $325,000 |
| Estimated Overhead | $350,000 |
| Estimated Activity: | |
| 9 volt battery | 100,000 direct labor hours |
| AAA battery | 400,000 direct labor hours |
| Actual Activity: | |
| 9 volt battery | 125,000 direct labor hours |
| AAA battery | 400,000 direct labor hours |
| Units Produced: | |
| 9 volt battery | 500,000 |
| AAA battery | 250,000 |
What is the predetermined overhead rate? (round to 2 decimal
places)
a.$0.65
b.$0.70
c.$0.67
d.$0.62
The following information is available for Department C for the
month of June:
| Units | Cost | |
| Work in process, June 1 (70% complete) | 10,000 | |
| Direct materials | $ 36,000 | |
| Direct labor | 18,000 | |
| Manufacturing overhead | 24,000 | |
| Total work in process, June 1 | $78,000 | |
| Started in production during June | 40,000 | |
| Costs added: | ||
| Direct materials | $108,000 | |
| Direct labor | 48,000 | |
| Manufacturing overhead | 60,600 | |
| Total costs added during June | $216,600 | |
| Work in process, June 30 (80% complete) | 4,000 |
Materials are added at the beginning of the process. Round unit
costs to two decimal places.
The cost of ending work in process using the weighted average
method is
a. $23,760.
b.$16,992.
c.$21,312.
d.None of these choices are correct
In: Accounting
Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc., has been experiencing financial difficulty for some time. The company’s contribution format income statement for the most recent month is given below:
| Sales (13,000 units × $20 per unit) | $ | 260,000 | |
| Variable expenses | 130,000 | ||
| Contribution margin | 130,000 | ||
| Fixed expenses | 145,000 | ||
| Net operating loss | $ | (15,000 | ) |
Required:
1. Compute the company’s CM ratio and its break-even point in unit sales and dollar sales.
2. The president believes that a $6,800 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an $82,000 increase in monthly sales. If the president is right, what will be the increase (decrease) in the company’s monthly net operating income?
3. Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $33,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net operating income (loss)?
4. Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop computer battery would grow sales. The new package would increase packaging costs by $0.40 per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $4,400?
5. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $54,000 each month.
a. Compute the new CM ratio and the new break-even point in unit sales and dollar sales.
b. Assume that the company expects to sell 20,800 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are. (Show data on a per unit and percentage basis, as well as in total, for each alternative.)
c. Would you recommend that the company automate its operations (Assuming that the company expects to sell 20,800)?
In: Accounting
Multiple steps are requried for this question
Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below:
| Fixed Element per Month |
Variable Element per Customer Served | Actual Total for May |
|||||
| Revenue | $ | 5,600 | $ | 182,000 | |||
| Employee salaries and wages | $ | 55,000 | $ | 1,600 | $ | 110,300 | |
| Travel expenses | $ | 850 | $ | 27,200 | |||
| Other expenses | $ | 34,000 | $ | 32,600 | |||
When preparing its planning budget the company estimated that it would serve 30 customers per month; however, during May the company actually served 35 customers.
Please answer the following letters towards the question
a. What amount of revenue would be included in Adger’s flexible budget for May?
b. What amount of employee salaries and wages would be included in Adger’s flexible budget for May?
c. What amount of travel expenses would be included in Adger’s flexible budget for May?
d. What amount of other expenses would be included in Adger’s flexible budget for May?
e. What net operating income would appear in Adger’s flexible budget for May?
f. What is Adger’s revenue variance for May? (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.)
g. What is Adger’s employee salaries and wages spending variance for May? (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.)
h. What is Adger’s travel expenses spending variance for May? (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.)
i What is Adger’s other expenses spending variance for May? (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.)
j. What amount of revenue would be included in Adger’s planning budget for May?
k. What amount of employee salaries and wages would be included in Adger’s planning budget for May?
l. What amount of travel expenses would be included in Adger’s planning budget for May?
m. What amount of other expenses would be included in Adger’s planning budget for May?
n. What activity variance would Adger report in May with respect to its revenue? (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.)
o. What activity variances would Adger report with respect to each of its expenses for May? (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.)
In: Accounting
home / study / business / finance / finance questions and answers / suppose you invest $20,000 by purchasing 200 shares of abbott labs (abt) at $50 per share, ... Question: Suppose you invest $20,000 by purchasing 200 shares of Abbott Labs (ABT) at $50 per share, 200 sh... Suppose you invest $20,000 by purchasing 200 shares of Abbott Labs (ABT) at $50 per share, 200 shares of Lowes (LOW) at $30 per share, and 100 shares of Ball Corporation (BLL) at $40 per share. Suppose over the next year Ball has a return of 12.5%, Lowes has a return of 20%, and Abbott Labs has a return of -10%. The weight of Abbott Labs in your portfolio after one year is closest to:
A. 20 %
B. 34.8%
C. 30 %
D. 36%
In: Accounting
On January 1, 2017, Panther, Inc., issued securities with a total fair value of $588,000 for 100 percent of Stark Corporation's outstanding ownership shares. Stark has long supplied inventory to Panther. The companies expect to achieve synergies with production scheduling and product development with this combination.
Although Stark's book value at the acquisition date was $322,000, the fair value of its trademarks was assessed to be $60,000 more than their carrying amounts. Additionally, Stark's patented technology was undervalued in its accounting records by $206,000. The trademarks were considered to have indefinite lives, and the estimated remaining life of the patented technology was eight years.
In 2017, Stark sold Panther inventory costing $87,500 for $175,000. As of December 31, 2017, Panther had resold 80 percent of this inventory. In 2018, Panther bought from Stark $162,000 of inventory that had an original cost of $81,000. At the end of 2018, Panther held $43,800 (transfer price) of inventory acquired from Stark, all from its 2018 purchases.
During 2018, Panther sold Stark a parcel of land for $101,800 and recorded a gain of $18,200 on the sale. Stark still owes Panther $70,800 (current liability) related to the land sale.
At the end of 2018, Panther and Stark prepared the following statements in preparation for consolidation.
Panther, Inc. Stark Corporation
Revenues $ (810,800 ) $ (375,000 )
Cost of goods sold 348,600 196,700
Other operating expenses 190,800 84,200
Gain on sale of land (18,200 ) 0
Equity in Stark's earnings (45,750 ) 0
Net income $ (335,350 ) $ (94,100 )
Retained earnings 1/1/18 $ (373,500 ) $ (305,500 )
Net income (335,350 ) (94,100 )
Dividends declared 91,600 32,000
Retained earnings 12/31/18 $ (617,250 ) $ (367,600 )
Cash and receivables $ 124,000 $ 176,000
Inventory 377,800 125,400
Investment in Stark 736,100 0
Trademarks 0 66,000
Land, buildings, and equip. (net) 775,600 318,600
Patented technology 0 142,200
Total assets $ 2,013,500 $ 828,200
Liabilities $ (679,450 ) $ (266,500 )
Common stock (400,000 ) (150,000 )
Additional paid-in capital (316,800 ) (44,100 )
Retained earnings 12/31/18 (617,250 ) (367,600 )
Total liabilities and equity $ (2,013,500 ) $ (828,200 )
Show how Panther computed its $45,750 equity in Stark's earnings balance. Prepare a 2018 consolidated worksheet for Panther and Stark.
In: Accounting
Question:
Part 1. Gary and Joy developed a neat Bento box for children. The shape of the containers encourages healthy eating and it is very popular. They have been paying another company to manufacture the boxes for them but are interested in manufacturing the boxes themselves. They've developed the following cost estimates:
Sales (100,000 units)$ 1,000,000Costs:FixedVariable Raw Materials$ 0$ 300,000 Direct Labor0200,000 Factory Costs100,000150,000 Selling and Administrative Costs110,00050,000Total Costs$ 210,000$ 700,000Operating Income$ 90,000
ANSWER
1.70000 Units
2.120000 Units
Part 2. Gary and Joy are concerned that the estimated fixed costs are too low. They believe that they'll need additional equipment, increasing their fixed costs by $ 31,500. Also, there has been a change in the corporate tax rate. Adjust your analysis to assume an increase of $31.500 in fixed costs and the new corporate income tax rate.
the 2018 corporate tax rate needs to be found online and cited in APA
PT1 was already solved, I just need help with PT2
In: Accounting
Walsh Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations:
| Variable costs per unit: | ||
| Manufacturing: | ||
| Direct materials | $ | 24 |
| Direct labor | $ | 12 |
| Variable manufacturing overhead | $ | 3 |
| Variable selling and administrative | $ | 2 |
| Fixed costs per year: | ||
| Fixed manufacturing overhead | $ | 240,000 |
| Fixed selling and administrative expenses | $ | 60,000 |
During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company’s product is $82 per unit.
Required:
1. Assume the company uses variable costing:
a. Compute the unit product cost for Year 1 and Year 2.
b. Prepare an income statement for Year 1 and Year 2.
2. Assume the company uses absorption costing:
a. Compute the unit product cost for Year 1 and Year 2.
b. Prepare an income statement for Year 1 and Year 2.
3. Reconcile the difference between variable costing and absorption costing net operating income in Year 1.
In: Accounting
Home Hardware reported beginning inventory of 20 shovels, for a total cost of $100. The company had the following transactions during the month: Jan. 2 Sold 4 shovels on account at a selling price of $10 per unit. Jan 16 Sold 10 shovels on account at a selling price of $10 per unit. Jan 18 Bought 5 shovels on account at a cost of $5 per unit. Jan 19 Sold 10 shovels on account at a selling price of $10 per unit. Jan 24 Bought 10 shovels on account at a cost of $5 per unit. Jan 31 Counted inventory and determined that 10 units were on hand.
Record a journal entry that shows all goods initially on hand at the beginning of the period (in the Inventory account) and all goods bought during the period (in the purchases account) as having been sold by the end of the period.
In: Accounting
Mayfair Co. allows select customers to make purchases on credit. Its other customers can use either of two credit cards: Zisa or Access. Zisa deducts a 3% service charge for sales on its credit card. Access deducts a 2% service charge for sales on its card. Mayfair completes the following transactions in June.
| June | 4 | Sold $650 of merchandise on credit (that had cost $400) to Natara Morris terms n/30. | ||
| 5 | Sold $6,900 of merchandise (that had cost $4,200) to customers who used their Zisa cards. | |||
| 6 | Sold $5,850 of merchandise (that had cost $3,800) to customers who used their Access cards. | |||
| 8 | Sold $4,350 of merchandise (that had cost $2,900) to customers who used their Access cards. | |||
| 13 | Wrote off the account of Abigail McKee against the Allowance for Doubtful Accounts. The $429 balance in McKee’s account stemmed from a credit sale in October of last year. | |||
| 18 | Received Morris’s check in full payment for the purchase of June 4. |
Required:
Prepare journal entries to record the preceding transactions and
events. (The company uses the perpetual inventory system.)
(If no entry is required for a transaction/event, select
"No journal entry required" in the first account
field.)
In: Accounting