Pitman Company is a small editorial services company owned and operated by Jan Pitman. On October 31, 2019, the end of the current year, Pitman Company's accounting clerk prepared the following unadjusted trial balance:

The data needed to determine year-end adjustments are as follows:

Required:

• Unexpired insurance at October 31, $4,560.
• Supplies on hand at October 31, $560.
• Depreciation of building for the year, $3,010.
• Depreciation of equipment for the year, $2,610.
• Unearned rent at October 31, $1,690.
• Accrued salaries and wages at October 31, $2,950.
• Fees earned but unbilled on October 31, $17,300.

1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation Expense—Building; Depreciation Expense—Equipment; and Supplies Expense.

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1. Before you begin, identify which adjusting entry goes with which additional account. As you go through each of these, consider the other sides of the adjusting entry transaction and identify related accounts. Keep in mind that you will be making an adjusting entry for each of these that affects at least one income statement account (revenues or expenses) and one balance sheet account (assets or liabilities). In the case of the insurance transaction, you will have to calculate the amount of insurance expired. In the case of supplies, you will need to calculate the amount of supplies used (expense). In the case of rent, you will need to calculate the amount of rent earned (revenue).

1. Journalize the adjusting entries using the following additional accounts, Salaries and Wages Payable, Rent Revenue, Insurance Expense, Depreciation Expense—Building, Depreciation Expense—Equipment, and Supplies Expense.

Please answer questions in the order listed. You do not need to be completely correct, but I do need to see an honest effort. For this post, YOU MUST SHOW YOUR WORK, on any question requiring math. This is to make it so that I can see where exactly where you mis-stepped in your calculation or logic, and/or so that your classmates can learn from you.

5.) MicroServe needs $100,000 to upgrade its warehouse. Dayna, the CEO of MicroServe, thinks they can put off the upgrade for 5 years. The company will make 5 annual deposits to fund this expansion. If the account earns 8% interest, how much does Dayna need to deposit every year? (Round your answers to the nearest dollar and show your work!!!)

6.) How is the carrying value of a bond computed?

7.) When the effective interest rate is higher than the stated interest rate on a bond issue, will the bond sell at a discount or premium? Why?

8.) Explain the difference between the straight-line and the effective interest method of amortization of bond premiums and discounts.

The budget director for Solomon Cleaning Services prepared the following list of expected selling and administrative expenses. All expenses requiring cash payments are paid for in the month incurred except salary expense and insurance. Salary is paid in the month following the month in which it is incurred. The insurance premium for six months is paid on October 1. October is the first month of operations; accordingly, there are no beginning account balances.

Required

1. Complete the schedule of cash payments for S&A expenses by filling in the missing amounts.

2. Determine the amount of salaries payable the company will report on its pro forma balance sheet at the end of the fourth quarter.

3. Determine the amount of prepaid insurance the company will report on its pro forma balance sheet at the end of the fourth quarter.

4. October November December Budgeted S&A Expenses Equipment lease expense $6,800 $6,800 $6,800 Salary expense 5,100 5,600 6,000 Cleaning supplies 2,850 2,760 3,080 Insurance expense 1,400 1,400 1,400 Depreciation on computer 1,900 1,900 1,900 Rent 1,900 1,900 1,900 Miscellaneous expenses 710 710 710 Total operating expenses $20,660 $21,070 $21,790 Schedule of Cash Payments for S&A Expenses Equipment lease expense $6,800 $6,800 $6,800 Prior month’s salary expense, 100% 0 5,100 5,600 Cleaning supplies 2,850 2,760 3,080 Insurance premium 0 0 Depreciation on computer 0 0 0 Rent 1,900 1,900 1,900 Miscellaneous expenses 710 710 710 Total disbursements for operating expenses $20,660 $17,270 $18,090

Middler Corporation, a manufacturer of electronics and communications systems, uses a service department charge system to charge profit centers with Computing and Communications Services (CCS) service department costs. The following table identifies an abbreviated list of service categories and activity bases used by the CCS department. The table also includes some assumed cost and activity base quantity information for each service for October. CCS Service Category Activity Base Budgeted Cost Budgeted Activity Base Quantity Help desk Number of calls $96,750 2,500 Network center Number of devices monitored 660,250 9,500 Electronic mail Number of user accounts 71,000 7,100 Handheld technology support Number of handheld devices issued 142,400 8,900 One of the profit centers for Middler Corporation is the Communication Systems (COMM) sector. Assume the following information for the COMM sector: The sector has 2,000 employees, of whom 60% are office employees. Almost all office employees (90%) have a computer on the network. 95 percent of the employees with a computer also have an e-mail account. The average number of help desk calls for October was 1 calls per individual with a computer. There are 290 additional printers, servers, and peripherals on the network beyond the personal computers. All the nonoffice employees have been issued a handheld device. a. Determine the service charge rate for the four CCS service categories for October. Round your answers to two decimal places. CCS Service Category Service Charge Rate Help desk $ Per call Network center $ Per device monitored Electronic mail $ Per user or e-mail account Handheld technology support $ Per device b. Determine the charges to the COMM sector for the four CCS service categories for October. October charges to the COMM sector: Help desk charge $ Network center charge $ Electronic mail charge $ Handheld technology support $

1. Hickory Furniture Company paid for the following costs during the month of May:

Hickory sold $32,000 of the inventory and has agreed to pay warranty expenses for its customers. These are expected to be $1,600 and occur evenly over the next four months (i.e., starting in June).

What is the amount of Hickory’s cash-basis expenses for the month of May?

Multiple Choice

• $33,600

• $50,000

• $42,400

• $51,600

2. The residual approach to allocate transaction prices to multiple performance obligations in a contract is appropriate when:

Multiple Choice

• None of the goods and services included in the contract are not sold on a stand-alone basis.

• None of the answer choices are correct.

• The stand-alone price of all of the goods or services is known.

• The stand-along price of one or more of the goods or services is highly variable or uncertain.

3. A patient of Dr. Jones presents his Medicare card after his appointment. The total charge for the services was $100; however, Medicare will pay only $60 for this service and the patient is to pay $20. Acceptance of the patient’s Medicare insurance creates a contract:

Multiple Choice

• for payment of $60 and a price concession of $40.

• for $20 and an $80 discount or price concession.

• for payment of $100, regardless of what Medicare will pay.

• for payment of $80 and a $20 discount or price concession.

Mercury Bag Company produces cases of grocery bags. The managers at Mercury are trying to develop budgets for the upcoming quarter. The following data have been gathered. Projected sales in units 1,960 cases Selling price per case $ 240 Inventory at the beginning of the quarter 150 cases Target inventory at the end of the quarter 100 cases Direct labor hours needed to produce one case 2 hours Direct labor wages $ 10 per hour Direct materials cost per case $ 8 Variable manufacturing overhead cost per case $ 6 Fixed overhead costs for the upcoming quarter $ 220,000

a. Using the above information, develop Mercury's sales forecast in dollars and production schedule in units.

b. What is Mercury's budgeted variable manufacturing cost per case?

c. Prepare Mercury's manufacturing cost budget.

d. What is the projected ending value of the Inventory account?

Mercury Bag Company produces cases of grocery bags. The managers at Mercury are trying to develop budgets for the upcoming quarter. The following data have been gathered.

Since the beginning of the financial year, Large Mart has spent $100,000 to create a new computer program that is able to automatically summarise the content of a university lecture without any manual work being required by students. Large Mart decided to undertake this project because its programming department knew it had the technical knowledge to develop the program successfully, and college students had previously expressed strong interest to purchase such a program. This week, the program has been completed and it will go on sale next week. The Large Mart accounting department is unsure if the $100,000 that was spent on the creation of the program is regarded as a development or research cost. As a result, the accounting department is also unsure how to account for the monies spent on the creation of the program.

1) Provide a detailed discussion of the difference between development and research expenditures, and explain what criteria must be used to distinguish between development and research expenditures in the Australian financial accounting environment.  

2) Determine if the creation of the program represents development or research expenditure, using a detailed evaluation of the criteria you have identified in question 1, and explain how the funds spent on the creation of the program should be accounted for

Tastyfreeze Company is a small producer of fruit-flavored frozen desserts. For many years, its products have had strong regional sales because of brand recognition; however, other companies have begun marketing similar products in the area, and price competition has become increasingly important. Dan O’Mara, the company’s controller, is planning to implement a standard cost system for Tastyfreeze and has gathered considerable information from his coworkers about production and materials requirements for Tastyfreeze’s products. Dan believes that the use of standard costs will allow the company to improve cost control, make better pricing decisions, and enhance strategic management. Tastyfreeze’s most popular product is raspberry sherbet. The sherbet is produced in 10-gallon batches, each of which requires 6 quarts of good raspberries and 10 gallons of other ingredients. The fresh raspberries are sorted by hand before they enter the production process. Because of imperfections in the raspberries and normal spoilage, 1 quart of berries is discarded for every 4 accepted. The standard direct labor time for sorting to obtain 1 quart of acceptable raspberries is 5 minutes. The acceptable raspberries are then blended with the other ingredients; blending requires 15 minutes of direct labor time per batch. After blending, the sherbet is packaged in quart containers. Dan has gathered the following price information: Tastyfreeze purchases raspberries for $6 per quart. All other ingredients cost $2.90 per gallon. Direct labor is paid at the rate of $20 per hour. The total packaging cost (labor and materials) for the sherbet is $0.95 per quart. Required: 1. Develop the standard cost for the direct cost components of a 10-gallon batch of raspberry sherbet. For each direct cost component, the standard cost should identify the following: (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. Standard quantity. b. Standard rate (or price). c. Standard cost per 10-gallon batch. Next Visit question mapQuestion 5 of 6 Total 5 of 6 Prev

The following transactions occurred during March 2021 for the Wainwright Corporation. The company owns and operates a wholesale warehouse.

1. Issued 48,000 shares of common stock in exchange for $480,000 in cash.
2. Purchased equipment at a cost of $58,000. $19,000 cash was paid and a notes payable to the seller was signed for the balance owed.
3. Purchased inventory on account at a cost of $114,000. The company uses the perpetual inventory system.
4. Credit sales for the month totaled $210,000. The cost of the goods sold was $88,000.
5. Paid $6,800 in rent on the warehouse building for the month of March.
6. Paid $7,800 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2021.
7. Paid $88,000 on account for the merchandise purchased in 3.
8. Collected $73,000 from customers on account.
9. Recorded depreciation expense of $2,800 for the month on the equipment.

Post the above transactions to the below T-accounts. Assume that the opening balances in each of the accounts is zero. Prepare a trial balance from the ending account balances

Hi-Tek Manufacturing, Inc., makes two types of industrial component parts—the B300 and the T500. An absorption costing income statement for the most recent period is shown:

Hi-Tek produced and sold 60,300 units of B300 at a price of $20 per unit and 12,600 units of T500 at a price of $39 per unit. The company’s traditional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the company’s two product lines is shown below:

The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek’s ABC implementation team concluded that $57,000 and $101,000 of the company’s advertising expenses could be directly traced to B300 and T500, respectively. The remainder of the selling and administrative expenses was organization-sustaining in nature. The ABC team also distributed the company’s manufacturing overhead to four activities as shown below:

Required:

1. Compute the product margins for the B300 and T500 under the company’s traditional costing system.

2. Compute the product margins for B300 and T500 under the activity-based costing system.

3. Prepare a quantitative comparison of the traditional and activity-based cost assignments.

AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February:

The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,900 plus $30 per job, and the actual mobile lab operating expenses for February were $9,240. The company expected to work 150 jobs in February, but actually worked 154 jobs.

Required:

Prepare a flexible budget performance report showing AirQual Test Corporation’s revenue and spending variances and activity variances for February. (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.)

Statement of Cash Flows—Indirect Method

The comparative balance sheet of Merrick Equipment Co. for December 31, 20Y9 and 20Y8, is as follows:

Additional data obtained from an examination of the accounts in the ledger for 20Y9 are as follows:

1. Equipment and land were acquired for cash.
2. There were no disposals of equipment during the year.
3. The investments were sold for $91,800 cash.
4. The common stock was issued for cash.
5. There was a $141,680 credit to Retained Earnings for net income.
6. There was a $102,000 debit to Retained Earnings for cash dividends declared.

Required:

Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

Braxen Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversify in order to stabilize sales throughout the year. A natural area for the company to consider is the production of winter lotions and creams to prevent dry and chapped skin.

After considerable research, a winter products line has been developed. However, Braxen's president has decided to introduce only one of the new products for this coming winter. If the product is a success, further expansion in future years will be initiated.

The product selected (called Chap-Off) is a lip balm that will be sold in a lipstick-type tube. The product will be sold to wholesalers in boxes of 24 tubes for $9 per box. Because of excess capacity, no additional fixed manufacturing overhead costs will be incurred to produce the product. However, a $105,000 charge for fixed manufacturing overhead will be absorbed by the product under the company’s absorption costing system.

Using the estimated sales and production of 150,000 boxes of Chap-Off, the Accounting Department has developed the following manufacturing cost per box:

The costs above relate to making both the lip balm and the tube that contains it. As an alternative to making the tubes for Chap-Off, Braxen has approached a supplier to discuss the possibility of buying the tubes. The purchase price of the supplier's empty tubes would be $1.70 per box of 24 tubes. If Braxen Industries stops making the tubes and buys them from the outside supplier, its direct labor and variable manufacturing overhead costs per box of Chap-Off would be reduced by 10% and its direct materials costs would be reduced by 30%.

5. What is the maximum price that Braxen should be willing to pay the outside supplier for a box of 24 tubes?

6. Instead of sales of 150,000 boxes of tubes, revised estimates show a sales volume of 185,000 boxes of tubes. At this higher sales volume, Braxen would need to rent extra equipment at a cost of $65,000 per year to make the additional 35,000 boxes of tubes. Assuming that the outside supplier will not accept an order for less than 185,000 boxes of tubes, what is the financial advantage (disadvantage) in total (not per box) if Braxen buys 185,000 boxes of tubes from the outside supplier? Given this new information, should Braxen Industries make or buy the tubes?

7. Refer to the data in Required 6. Assume that the outside supplier will accept an order of any size for the tubes at a price of $1.70 per box. How many boxes of tubes should Braxen make? How many boxes of tubes should it buy from the outside supplier?

Diego Company manufactures one product that is sold for $73 per unit in two geographic regions—the East and West regions. The following information pertains to the company’s first year of operations in which it produced 44,000 units and sold 39,000 units.

The company sold 29,000 units in the East region and 10,000 units in the West region. It determined that $180,000 of its fixed selling and administrative expenses is traceable to the West region, $130,000 is traceable to the East region, and the remaining $90,000 is a common fixed cost. The company will continue to incur the total amount of its fixed manufacturing overhead costs as long as it continues to produce any amount of its only product.  

7. What is the amount of the difference between the variable costing and absorption costing net operating incomes (losses)?

8a. What is the company’s break-even point in unit sales?

8b. Is it above or below the actual sales volume? Above Below

9.If the sales volumes in the East and West regions had been reversed, what would be the company’s overall break-even point in unit sales?

10. What would have been the company’s variable costing net operating income (loss) if it had produced and sold 39,000 units?