The business manufactures custom patios made of concrete, brick, fiberglass, and lumber- depending upon customer preference. The company's fiscal year is the calendar year. At the beginning of July, selected balances were as follows:

Direct Materials Inventory, July 1	$4200
Work-In-Process Inventory, July 1	5540*
Manufacturing Overhead Applied to Date	32640
Actual Manufacturing Overhead to Date	31650

*Details for Work in Process

	Job 85		Job 86		Job 87		Total
Direct Materials	$600		800		900
Direct Labor	320		540		580
Manufacturing Overhead	400		675		725
=	1320	+	2015	+	2205	=	5540

(the last row are the separate columns added together and then totaled at the end).

During July, total direct materials purchased were $4900. Overhead costs incurred were $3800. Direct materials and direct labor used were as follows:

	Materials Requested Amounts	Labor Time Ticket Amounts
Job 85	$1100	$840
Job 86	500	360
Job 87	1300	1200
Job 88	2000	800

The Company uses conventional overhead application with overhead charged to jobs at the rate of $1.25 per dollar of direct labor cost. The patios for Jobs 85 and 87 were completed during July and sold at cost plus a 30 percent markup.

Prepare an Excel Spreadsheet that determines the cost of each job at the end of July. Then program cells that determine end of July balance of direct materials inventory, end of July balance of work in process inventory, end of July balance of finished goods, sales for July, cost of goods sold for July, and gross profit margin for July. On the lower part of the spreadsheet: Prepare a formal cost of goods manufactured schedule for the month of July.

(the company only deals with underapplied or overapplied overhead at the end of December therefore it is not needed in July).

Alexi's bought a home for $1,000,000 during year 1. She made a $200,000 down payment and financed the other $800,000. This home is her only residence. Assume that by year 10 her home had appreciated to $1,5000,000 and the balance on her mortgage was down to $600,000, interest rates had gone down and Alexis refinanced her home. She borrowed $1,000,000 and paid off her first mortgage. She used the remaining $400,000 for projects unrelated to her home. How much is her qualifying home-related debt for tax purposes?

The country its been taxed on is irrelevant

Yoshi Company completed the following transactions and events involving its delivery trucks.

2016

Jan.		1		Paid $22,015 cash plus $1,485 in sales tax for a new delivery truck estimated to have a five-year life and a $2,000 salvage value. Delivery truck costs are recorded in the Trucks account.
Dec.		31		Recorded annual straight-line depreciation on the truck.

2017

Dec.

31

Due to new information obtained earlier in the year, the truck’s estimated useful life was changed from five to four years, and the estimated salvage value was increased to $2,850. Recorded annual straight-line depreciation on the truck.

2018

Dec.		31		Recorded annual straight-line depreciation on the truck.
Dec.		31		Sold the truck for $5,400 cash.

Required:

1-a. Calculate depreciation for year 2017.
1-b. Calculate book value and gain (loss) for sale of Truck on December, 2018.
1-c. Prepare journal entries to record these transactions and events.

Calculate depreciation for year 2017.

	Total cost Less accumulated depreciation (from 2016) Book value Less revised salvage value Remaining cost to be depreciated Years of life remaining Total depreciation for 2017

Calculate book value and gain (loss) for sale of Truck on December, 2018.

	Depreciation expense (for 2016) Depreciation expense (for 2017) Depreciation expense (for 2018) Accumulated depreciation 12/31/2018 0 Book value of truck at 12/31/2018 Total cost Accumulated depreciation Book value 12/31/2018

• 1

  Record the total cost of the new delivery truck.

• 2

  Record the year-end adjusting entry for the depreciation expense of the delivery truck.

• 3

  Record the year-end adjusting entry for the depreciation expense of the delivery truck.

• 4

  Record the year-end adjusting entry for the depreciation expense of the delivery truck.

• 5

  Record the sale of the delivery truck for $5,400 cash.

A machine costing $209,400 with a four-year life and an estimated $19,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 476,000 units of product during its life. It actually produces the following units: 122,000 in 1st year, 122,500 in 2nd year, 121,000 in 3rd year, 120,500 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimate—this difference was not predicted. (The machine must not be depreciated below its estimated salvage value.)

  
Required:

Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. (Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.)

Compute depreciation for each year (and total depreciation of all years combined) for the machine under each Double-declining-balance.

	DDB Depreciation for the Period End of Period Year Beginning of Period Book Value Depreciation Rate Depreciation Expense Accumulated Depreciation Book Value 1 $209,400 % $209,400 2 % 0 3 % 0 4 % 0 $0

. A partially completed pension spreadsheet showing the relationships among the elements that constitute Carney, Inc.’s defined benefit pension plan follows. At the end of 2018, Carney revised its pension formula and incurred a prior service cost of $100 million. At the end of 2019, the pension formula was amended again, creating an additional prior service cost of $200 million. At the beginning of 2020, $400 million prior service cost was incurred. At the beginning of 2021, $300 million prior service cost was incurred. In 2018 - 2021, the actuary’s discount rate remained 10%, and the average remaining service life of the active employee group remained 10 years. The expected rate of return on assets was 10% in 2019, and increased by 1% each year.

1. Fill in blanks in the 2019 pension spreadsheet.

2019 Pension spreadsheet ($ in millions)	(PBO)	Plan Assets	Prior Service Cost–AOCI	Net Loss (Gain) –AOCI	Pension Expense	Cash	Net Pension (Liability) / Asset
Balance, Jan. 1, 2019	(25,000)	20,000	100	4,500			(5,000)
Service cost	(800)
Interest cost
Prior Service Cost
Expected return on assets
Adjust for: Gain (loss) on assets
Amortization of: "Prior service cost-AOCI"
Amortization of: "Net Loss (Gain)-AOCI"
Gain (Loss) on PBO	7000
Cash funding						(1,000)
Retiree benefits	950
Bal., Dec. 31, 2019		22,450	290	(3,100)	1,510

The following incorrect income statement was prepared by the accountant of the Axel Corporation:

AXEL CORPORATION Income Statement For the Year Ended December 31, 2021
Revenues and gains:
Sales revenue				$	760,000
Interest revenue					49,000
Gain on sale of investments					96,000
Total revenues and gains					905,000
Expenses and losses:
Cost of goods sold	$	410,000
Selling expense		76,000
Administrative expense		96,000
Interest expense		33,000
Restructuring costs		72,000
Income tax expense		54,500
Total expenses and losses					741,500
Net Income				$	163,500
Earnings per share				$	1.64

Required:
Prepare a multiple-step income statement for 2021 applying generally accepted accounting principles. The income tax rate is 25%. (Amounts to be deducted should be indicated with a minus sign. Round EPS answer to 2 decimal places.)
  

Liabilities can be listed as both long-term and short-term, based on the time frame for paying them. You have a notes payable which was issued to purchase inventory and it was issued on 10/15 and is for 90 days. Determine how to report this on balance sheet and support your reason for this reporting.

The company knows they cannot pay this note in 90 days and is working to convert it to be payable over 15 months. Does this change the method you report on the balance sheet? Why or why not?

What are unsecured notes? Why would they carry a relatively high interest rate? What are convertible securities? Why are they good for the investor and for the company? Why would they carry a relatively low interest rate? What does callable mean? What advantage does this feature give a company?

On February 8, 2018, Holly purchased a residential apartment building. The cost basis assigned to the building is $209,000. Holly also owns another residential apartment building that she purchased on December 15, 2018, with a cost basis of $588,000.

Click here to access the depreciation tables.

If required, round intermediate calculations and final answers to nearest dollar.

a. Calculate Holly's total depreciation deduction for the apartments for 2018 using MACRS.
$

b. Calculate Holly's total depreciation deduction for the apartments for 2019 using MACRS.

$

Calculate the following:

Click here to access the various depreciation tables. If required, round your final answers to the nearest dollar. If your answer is zero, enter "0".

a. The first year of depreciation on a residential rental building costing $200,000 purchased July 2, 2018.
$

b. The second year (2019) of depreciation on a computer costing $5,000 purchased in May 2018, using the half-year convention and accelerated depreciation considering any bonus depreciation taken.
$

c. The first year of depreciation on a computer costing $2,800 purchased in May 2018, using the half-year convention and straight-line depreciation with no bonus depreciation.
$

d. The third year of depreciation on business furniture costing $8,000 purchased in March 2016, using the half-year convention and accelerated depreciation but no bonus depreciation.
$

Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $55,000 has today. (The real value of his retirement income will decline annually after he retires.) His retirement income will begin the day he retires, 10 years from today, at which time he will receive 24 additional annual payments. Annual inflation is expected to be 3%. He currently has $65,000 saved, and he expects to earn 8% annually on his savings. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below.

Open spreadsheet

Required annuity payments
Retirement income today	$55,000
Years to retirement	10
Years of retirement	25
Inflation rate	3.00%
Savings	$65,000
Rate of return	8.00%
Calculate value of savings in 10 years:			Formulas
Savings at t = 10			#N/A
Calculate value of fixed retirement income in 10 years:
Retirement income at t = 10			#N/A
Calculate value of 25 beginning-of-year retirement payments at t =10:
Retirement payments at t = 10			#N/A
Calculate net amount needed at t = 10:
Value of retirement payments			#N/A
Value of savings			#N/A
Net amount needed			#N/A
Calculate annual savings needed for next 10 years:
Annual savings needed for retirement			#N/A

How much must he save during each of the next 10 years (end-of-year deposits) to meet his retirement goal? Do not round your intermediate calculations. Round your answer to the nearest cent.

$  

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	$	1,704,000
Cost of goods sold		1,218,682
Gross margin		485,318
Selling and administrative expenses		550,000
Net operating loss	$	(64,682)

Hi-Tek produced and sold 60,000 units of B300 at a price of $20 per unit and 12,600 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	$	400,000			$	162,800			$	562,800
Direct labor	$	121,000			$	42,900				163,900
Manufacturing overhead										491,982
Cost of goods sold									$	1,218,682

The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek’s ABC implementation team concluded that $52,000 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)	$	212,382				91,000			62,900			153,900
Setups (setup hours)		117,600				74			220			294
Product-sustaining (number of products)		101,200				1			1			2
Other (organization-sustaining costs)		60,800				NA			NA			NA
Total manufacturing overhead cost	$	491,982

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))

Meca Concrete purchased a mixer on January 1, 2016, at a cost of $39,600. Straight-line depreciation for 2016 and 2017 was based on an estimated eight-year life and $2,400 estimated residual value. In 2018, Meca revised its estimate and now believes the mixer will have a total service life of only six years, and that the residual value will be only $1,400. Compute annual depreciation for 2018 and 2019.

Annual depreciation for 2018 and 2019-

Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost.

Last year, the company sold 48,000 of these balls, with the following results:

Sales (48,000 balls)	$	1,200,000
Variable expenses		720,000
Contribution margin		480,000
Fixed expenses		319,000
Net operating income	$	161,000

Required:

1. Compute (a) last year's CM ratio and the break-even point in balls, and (b) the degree of operating leverage at last year’s sales level.

2. Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break-even point in balls?

3. Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $161,000, as last year?

4. Refer again to the data in (2) above. The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement 1a), what selling price per ball must it charge next year to cover the increased labor costs?

5. Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company’s new CM ratio and new break-even point in balls?

6. Refer to the data in (5) above.

a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $161,000, as last year?

b. Assume the new plant is built and that next year the company manufactures and sells 48,000 balls (the same number as sold last year). Prepare a contribution format income statement and Compute the degree of operating leverage.

The Spokane Recycling Company (SRC) purchases old water and soda bottles and recycles them to produce plastic covers for outdoor furniture. The company processes the bottles in a special piece of equipment that first​ melts, then reforms the plastic into large sheets that are cut to size. The edges from the cut pieces are sold for use as package filler. The filler is considered a byproduct. SRC can produce 27 table​ covers, 77 chair covers and 9 pounds of package filler from 100 pounds of bottles.

In June, SRC had no beginning inventory. It purchased and processed 110,000 pounds of bottles at a cost of $ 880,000. SRC sold 22,000 table covers for $11 each, 77,000 chair covers for $12 each, and 4,000 pounds of package filler at $0.90 per pound.

Requirement 1. Assume that SRC allocates the joint costs to table and chair covers using the sales value at splitoff method and accounts for the byproduct using the production method. What is the ending inventory cost for each product and gross margin for SRC?

​First, allocate the joint costs. ​(Round the weighting values to two decimal​ places.)

	Table	Chair
	Covers	Covers	Total
Sales values at splitoff
Weighting
Joint costs allocated

Now complete the statement below for SRC.

​(Do not round intermediary calculations. Only round the amount you input in the cell to the nearest​ dollar.)

	Table	Chair
	Covers	Covers	Total
Revenues
Cost of goods sold:
Joint costs allocated
Less: Ending inventory
Cost of goods sold
Gross margin

Requirement 2. Assume that SRC allocates the joint costs to table and chair covers using the sales value at splitoff method and accounts for the byproduct using the sales method. What is the ending inventory cost for each product and gross margin for SRC?

​First, allocate the joint costs. ​(Round the weighting values to two decimal​ places.)

	Table	Chair
	Covers	Covers	Total
Sales values at splitoff
Weighting
Joint costs allocated

Now complete the statement below for SRC

​(If a box is not used in the​ table, leave the box​ empty; do not enter a zero. Do not round intermediary calculations. Only round the amount you input in the cell to the nearest​ dollar.)

	Table	Chair	Plastic
	Covers	Covers	Filler (lbs)	Total
Revenues
Cost of goods sold:
Joint costs allocated
Less: Ending inventory
Cost of goods sold
Gross margin