Chipper, a calendar-year corporation, purchased new machinery for $1,135,000 in February 2018. In October, it purchased $2,105,000 of used machinery. What was Chipper’s maximum cost recovery deduction for 2018?

Question 1 options:

1) $1,243,621

2) $3,240,000

3) $1,038,114

4) $577,226

Sequential (Step) Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments Human Resources General Factory Fabricating Assembly Direct costs $175,000 $370,000 $114,800 $97,000 Normal activity: Number of employees — 40 70 150 Square footage 1,300 — 5,700 13,900 Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Now assume that Valron Company uses the sequential method to allocate support department costs. The support departments are ranked in order of highest cost to lowest cost. Required: 1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the sequential method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations. Proportion of Driver Used by Human Resources General Factory Fabricating Assembly Human Resources General Factory 2. Using the sequential method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. If an amount is zero, enter"0". Round your answers to the nearest dollar. Support Departments Producing Departments Human Resources General Factory Fabricating Assembly Direct costs $ $ $ $ Allocate: General Factory Human Resources Total after allocation $ $ $ $

Viejol Corporation has collected the following information after its first year of sales. Sales were $1,600,000 on 100,000 units, selling expenses $250,000 (40% variable and 60% fixed), direct materials $510,000, direct labor $290,600, administrative expenses $272,000 (20% variable and 80% fixed), and manufacturing overhead $350,000 (70% variable and 30% fixed). Top management has asked you to do a CVP analysis so that it can make plans for the coming year. It has projected that unit sales will increase by 10% next year.

(A) Compute (1) the contribution margin for the current year and the projected year, and (2) the fixed costs for the current year. (Assume that fixed costs will remain the same in the projected year.)

(B) Compute the break-even point in units and sales dollars for the current year. (Round intermediate calculations to 2 decimal places e.g. 2.25 and final answers to 0 decimal places, e.g. 1,225.)

(C) The company has a target net income of $200,000. What is the required sales in dollars for the company to meet its target? (Round answer to 0 decimal places, e.g. 1,225.)

(D) If the company meets its target net income number, by what percentage could its sales fall before it is operating at a loss? That is, what is its margin of safety ratio?

Respond to the following in a minimum of 175 words:

Discuss the role that pension funds play in company pension plans. What benefits accrue to companies who elect to use pension funds? How does the use of a pension fund change the accounting that must be done with respect to employee pension amounts?

Erkens Company uses a job costing system with normal costing and applies factory overhead on the basis of machine hours. At the beginning of the year, management estimated that the company would incur $2,553,000 of factory overhead costs and use 69,000 machine hours.

Erkens Company recorded the following events during the month of April:

1. Purchased 200,000 pounds of materials on account; the cost was $6.00 per pound.

2. Issued 130,000 pounds of materials to production, of which 20,000 pounds were used as indirect materials.

3. Incurred direct labor costs of $290,000 and $50,000 of indirect labor costs.

4. Recorded depreciation on equipment for the month, $77,700.

5. Recorded expired insurance costs for the manufacturing property, $4,500.

6. Paid $9,500 cash for utilities and other miscellaneous items for the manufacturing plant.

7. Completed Job H11 costing $8,500 and Job G28 costing $82,000 during the month and transferred them to the Finished goods inventory account.

8. Shipped Job G28 to the customer during the month. The job was invoiced at 30% above cost.

9. Used 9,700 machine hours during April.

Required:

1. Compute Erkens Company’s predetermined overhead rate for the year.

2. Prepare journal entries to record the events that occurred during April.

3-a. Compute the amount of overapplied or underapplied overhead.

3-b. Prepare a journal entry to close overapplied or underapplied overhead into cost of goods sold on April 30.

What are the equitable remedies if a contract is breached? Let's assume two parties agree that Party A will finish construction on a home by September 1st. If he has only completed half by that date, has he substantially performed? What's the remedy if the court determines there was a breach?

Lyon Center began operations on July 1. It uses a perpetual inventory system. During July, the company had the following purchases and sales.

New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect.

Calculate average cost for each unit. (For calculation and answers purpose round unit costs to 2 decimal places, e.g. 15.25.)

eTextbook and Media

List of Accounts

Incorrect answer iconYour answer is incorrect.

Determine the ending inventory under a perpetual inventory system using (1) FIFO, (2) moving-average, and (3) LIFO. (For calculation and answers purpose round unit costs to 2 decimal places, e.g. 15.25 and ending inventory values to 0 decimal places, e.g. 515.)

eTextbook and Media

List of Accounts

Correct answer iconYour answer is correct.

Which costing method produces the highest ending inventory valuation?

Calculate net sales:

Instructions
As you recall, you have started a business, Main Squeeze, that will sell lemonade. You have decided to incorporate the company for legal liability and taxation reasons.

The following are some of Main Squeeze’s transactions that occurred in April;

a. You put $3,000 cash into the company and signed over your car (with a value of $5,000). In exchange the company issued 8,000 shares to you.
b. Purchased a lemonade stand/trailer paying $600 cash on signing and financing the remainder with a loan over 5 years. The stands purchase price is $6,000.
c. Entered into a 5-year seasonal lease for prime boardwalk space with the city of saint john. Payments are $500 monthly from May to September.
d. Purchased a new juicer machine for $1,500 cash, and a water filtration system for $800 signing a short term note payable due in 4 months,
e. Ordered $500 worth of inventory of (lemons, sugar and cups) to be received May 3.
f. Hired a part-time employee for $1,500 per month who will start in May.

1.For each of the events, prepare journal entries if a transaction of the business exists, checking that credits equal debits. If a transaction does not exist, explain why there is no transaction for the business.
2.Create T-accounts, and post each of the transactions to determine balances at April 30th. Because this is a new business, beginning balances are $0
3.Prepare a trial balance, prepare a classified statement of financial position (with current assets and current liabilities sections) at April 30th (before beginning operations in May)
4.For each of the events, indicate if it is an investing activity (I) or financing activity (F) and the direction (+ for increases and – for decreases) and the amount of the effect on the cash flows using the following structure. Write NE if there is no effect on Cash flows.
5.Calculate the current ratio at April 30th. What does this ratio indicate about the ability of Main Squeeze to pay its current liabilities?

A company is able to produce four products and is planning its production mix for the next period.

Estimated cost, sales, and production data follow:

Product                                                       W                   X                    Y              Z

                                                                    ₤                    ₤                    ₤                 ₤

Selling Price/unit                                       29                  36                  61               51

Labour (@ ₤ 5/hr)                                    15                 10                  35                25

Material (@ ₤ 1/kg)                                   6                  18                  10               12    

Contribution                                              ₤8                 ₤8                 ₤16            ₤14

Resources/Unit                                            ₤                   ₤                   ₤                  ₤

Labour (hours)                                           3                    2                 7                  5

Materials (Kgs.)                                          6                    18                10               12

Maximum Demand (Units)                    5000                5000                5000          5000

Based on the above data, which is the most appropriate mix under the two following assumptions?

If labour hours are limited to 50,000 in a period or

If material is limited to 110,000 kgs in a period

How is merchandising inventory valued when using the lower-of-cost-or-market rule? a)

ABC Company paid $3,000 for its merchandise inventory. At the end of the accounting period, the merchandise inventory can now be replaced for $2,700 and this decline appears to be permanent. Write the journal entry to write down the inventory to LCM:

What are the effects of merchandise inventory errors on the financial statements? Fill in the blanks below with “understated” or “overstated”:

a) If the ending merchandise inventory is overstated, then cost of goods sold is _____________, and the net income is _______________.

b) If the ending merchandise inventory is understated, then cost of goods sold is ____________, and the net income is _______________.

How do we use inventory turnover and days’ sales in inventory to evaluate business performance?

a) What are the formulas for inventory turnover and days’ sales in inventory?

b) Calculate the inventory turnover and days’ sales in inventory based on the information below (show work):

Cost of goods sold $11,000

Beginning merchandise inventory 4,000

Ending merchandise inventory 3,000

Questions 4-8 USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT (5) QUESTIONS:

Pitchfork, Inc. sold merchandise to Min Corporation on June 1, 2019 and accepted an interest-bearing note with an 8% APR. Min agreed to make annual payments of P&I in the amount of $27,000 per year for 5 years with the first payment being made immediately. The remaining payments are to be remitted each June 1^st. Pitchfork’s year-end is December 31^st. Min’s normal cost to borrow is 8%.

Required:

Determine the Face Value of the note receivable that Pitchfork would recognize on Jun 1, 2019: $____________________________

(round your answer to the nearest whole dollar. Do not use commas or dollar signs when recording your answer.)

Question #5

Using the information presented in #4 above, determine the Interest Revenue that Pitchfork will recognize for the year ended Dec 31, 2020 on their Income Statement: $________________________

Question #6:

Using the information in #4 above, answer the next (3) questions by preparing the Balance Sheet as of Dec 31, 2019:

Current Assets:

Interest Receivable $___________________

Note Receivable $___________________

Long-Term Investments:

Note Receivable $___________________

Determine the balance in the Interest Receivable account as of Dec 31, 2019: $___________________

Question #7:

Using the information presented in #4 above, determine the current maturity of the long-term note receivable. (I.e. how much principal will be repaid in 2020 and therefore should be classified as a current asset.)

Question #8:

Using the information presented in #4 above, determine the balance of the Note Receivable that should be classified as a Long-Term Investment (I.e. the balance of the note receivable that will not be repaid within the next 12 months from the balance sheet dated Dec 31, 2019.)

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 below: Hi-Tek Manufacturing Inc. Income Statement Sales $ 1,770,500 Cost of goods sold 1,225,588 Gross margin 544,912 Selling and administrative expenses 610,000 Net operating loss $ (65,088) Hi-Tek produced and sold 60,500 units of B300 at a price of $21 per unit and 12,500 units of T500 at a price of $40 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: B300 T500 Total Direct materials $ 400,300 $ 162,900 $ 563,200 Direct labor $ 120,700 $ 42,500 163,200 Manufacturing overhead 499,188 Cost of goods sold $ 1,225,588 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek’s ABC implementation team concluded that $50,000 and $102,000 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: Manufacturing Activity Activity Cost Pool (and Activity Measure) Overhead B300 T500 Total Machining (machine-hours) $ 204,288 90,600 63,000 153,600 Setups (setup hours) 134,200 75 230 305 Product-sustaining (number of products) 100,400 1 1 2 Other (organization-sustaining costs) 60,300 NA NA NA Total manufacturing overhead cost $ 499,188 Required 1. Compute the product margins for the B300 and T500 under the company’s traditional costing system. (Do not round your overhead rate. Round your other intermediate and final answers to the nearest whole number.) 2. Compute the product margins for B300 and T500 under the activity-based costing system. (Negative product margins should be indicated by a minus sign. Round your intermediate calculations to 2 decimal places.) 3. Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Do not round your overhead rate. Round your other intermediate calculations and final answers to the nearest whole number. Round your "Percentage" answer to 1 decimal place. (i.e. .1234 should be entered as 12.3))

I know headquarters wants us to add that new product line,” said Dell Havasi, manager of Billings Company’s Office Products Division. “But I want to see the numbers before I make any move. Our division’s return on investment (ROI) has led the company for three years, and I don’t want any letdown.”

Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who have the highest ROIs. Operating results for the company’s Office Products Division for this year are given below:

The company had an overall return on investment (ROI) of 16.00% this year (considering all divisions). Next year the Office Products Division has an opportunity to add a new product line that would require an additional investment that would increase average operating assets by $2,501,000. The cost and revenue characteristics of the new product line per year would be:

Required:

1. Compute the Office Products Division’s ROI for this year.

2. Compute the Office Products Division’s ROI for the new product line by itself.

3. Compute the Office Products Division’s ROI for next year assuming that it performs the same as this year and adds the new product line.

4. If you were in Dell Havasi’s position, would you accept or reject the new product line?

5. Why do you suppose headquarters is anxious for the Office Products Division to add the new product line?

6. Suppose that the company’s minimum required rate of return on operating assets is 13% and that performance is evaluated using residual income.

a. Compute the Office Products Division’s residual income for this year.

b. Compute the Office Products Division’s residual income for the new product line by itself.

c. Compute the Office Products Division’s residual income for next year assuming that it performs the same as this year and adds the new product line.

d. Using the residual income approach, if you were in Dell Havasi’s position, would you accept or reject the new product line?