On August 31, 2019, the balance in the checkbook and the Cash account of the Dry Creek Bed and Breakfast was $12,370. The balance shown on the bank statement on the same date was $13,247.

Notes

1. The firm’s records indicate that a $1,550 deposit dated August 30 and a $711 deposit dated August 31 do not appear on the bank statement.
2. A service charge of $7 and a debit memorandum of $370 covering an NSF check have not yet been entered in the firm’s records. (The check was issued by Art Corts, a credit customer.)
3. The following checks were issued but have not yet been paid by the bank:
   

4. A credit memorandum shows that the bank collected a $2,134 note receivable and interest of $73 for the firm. These amounts have not yet been entered in the firm’s records.
   

Required:

1. Prepare a bank reconciliation statement for the firm as of August 31.
2. Record general journal entries for items on the bank reconciliation statement that must be journalized.

Analyze:
What effect did the journal entries recorded as a result of the bank reconciliation have on the fundamental accounting equation?

Problem 10-13 Basic Variance Analysis; the Impact of Variances on Unit Costs [LO10-1, LO10-2, LO10-3]

Koontz Company manufactures a number of products. The standards relating to one of these products are shown below, along with actual cost data for May.

The production superintendent was pleased when he saw this report and commented: “This $0.84 excess cost is well within the 4 percent limit management has set for acceptable variances. It's obvious that there's not much to worry about with this product."

Actual production for the month was 15,000 units. Variable overhead cost is assigned to products on the basis of direct labor-hours. There were no beginning or ending inventories of materials.

Required:

1. Compute the following variances for May:

a. Materials price and quantity variances.

b. Labor rate and efficiency variances.

c. Variable overhead rate and efficiency variances.

2. How much of the $0.84 excess unit cost is traceable to each of the variances computed in (1) above.

3. How much of the $0.84 excess unit cost is traceable to apparent inefficient use of labor time?

Equivalent Units of Production

The Converting Department of Hopkinsville Company had 640 units in work in process at the beginning of the period, which were 70% complete. During the period, 13,600 units were completed and transferred to the Packing Department. There were 720 units in process at the end of the period, which were 60% complete. Direct materials are placed into the process at the beginning of production.

Determine the number of equivalent units of production with respect to direct materials and conversion costs. If an amount is zero, enter in "0".

1. Assume that Mr. Shulman owned 100 shares of Exxon Mobile stock and 250 shares of General Electric stock when he died on December 1. The highest selling price for Exxon Mobile on that day was 41.24; the lowest selling price was 40.40. The highest selling price for GE on that day was 39.35; the lowest selling price was 38.95. Calculate the fair market value of all of the stock as of December 1.

2. In December 2003, Mrs. Nichols gave gifts of $20,000 to her son, Bruce; $20,000 to her son and daughter-in-law, David and Cheryl; $15,000 to a favorite nephew; and $10,000 to each of her seven grandchildren. What amount must Mrs. Nichols report to the IRS on her 2003 gift-tax return? Please show your calculations.

Direct Method, Reciprocal Method, Overhead Rates

Macalister Corporation is developing departmental overhead rates based on direct labor hours for its two production departments—Molding and Assembly. The Molding Department employs 23 people, and the Assembly Department employs 78 people. Each person in these two departments works 2,150 hours per year. The production-related overhead costs for the Molding Department are budgeted at $186,000, and the Assembly Department costs are budgeted at $84,000. Two support departments—Engineering and General Factory—directly support the two production departments and have budgeted costs of $204,000 and $370,000, respectively. The production departments’ overhead rates cannot be determined until the support departments’ costs are properly allocated. The following schedule reflects the use of the Engineering Department’s and General Factory Department’s output by the various departments.

For all requirements, round allocation ratios to four significant digits and round allocated costs to the nearest dollar.

Required:

1. Calculate the overhead rates per direct labor hour for the Molding Department and the Assembly Department using the direct allocation method to charge the production departments for support department costs. Round final answers to the nearest cent.

2. Calculate the overhead rates per direct labor hour for the Molding Department and the Assembly Department using the reciprocal method to charge support department costs to each other and to the production departments. Round final answers to the nearest cent. Round your intermediate calculations to four decimal places.

Bill​ (age 42) and Molly Hickok​ (age 39), residents of​ Anchorage, Alaska, recently told you that they have become increasingly worried about their retirement.​ Bill, a public school​ teacher, dreams of retiring at 62 so they can travel and visit family.​ Molly, a​ self-employed travel​ consultant, is unsure that their current retirement plan will achieve that goal. She is concerned that the cost of living in Alaska along with their lifestyle have them spending at a level they could not maintain. Although they have a nice income of more than $100,000 per​ year, they got a late start planning for​ retirement, which is now just 20 years away. Bill has tried to plan for the future by contributing to his​ 403(b) plan, but he is only investing 6 percent of his income when he could be investing 10 percent. Use what they told you along with the information below to help them prepare for a prosperous retirement.

3. Given their projected Social Security and investment​ income, how much will Bill and Molly need to invest annually to make up their income​ shortfall? What is the annual additional funding requirement to reach their income goal? ​(Round to the nearest​ dollar.)

What are the main features of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010?

Explain the three methods of fraud (Financial Statement Fraud, Occupational Fraud, Collusion), which means analyze each one and provide an example for each.

***Please make it short and simple.

Five brands are competing in the market.

• Company A has 35,000 units sold at $5.00/unit. It sold to 7,000 households in market size of 84,000.
• Company B has 12,000 units sold and revenues of $54,000 for these units. It sold to 3,000 households in market size of 21,000.
• Company C has 14,000 units sold at $5.50/unit. The average household purchase was 2 units. Its market size of 105,000.
• Company D has 5,000 units sold at $6.00/unit. It sold to 833 households in market size of 5,000.
• Company E has 22,000 units sold and revenues of $126,500 for these units. It sold to 5,500 households in market size of 22,000.

What is the "three firm" concentration revenue ratio value?

P made a 75% investment of Ksh.20 million in H on 31.12.2006 when the net assets of H were Ksh.24 million (issued capital Ksh.12 million plus retained earnings Ksh.12 million). On 31.12.2007, H made a 60% investment of Ksh.10 million in S when the net assets of S were Ksh.15 million (issued capital Ksh.10 million plus retained earnings Ksh.5 million).None of the entities has issued new shares since 31.12.2006. There has been no impairment of goodwill since the acquisitions. The group policy is to value non-controlling interest at the proportionate share of net assets of the subsidiary. The summarised statement of financial position at 31.12.2008 and income statement of the three entities are shown below:

Statement of financial position

Required:

Prepare consolidated statement of financial position of the P group as at 31:12:2008 and the income statement for the year ended 31.12.2008.

Scoring: Your score will be based on the number of correct matches. There is no penalty for incorrect or missing matches.

Match each of the following formulas and phrases with the term it describes.

Dawson Toys, Ltd., produces a toy called the Maze. The company has recently established a standard cost system to help control costs and has established the following standards for the Maze toy:

Direct materials: 7 microns per toy at $0.30 per micron

Direct labor: 1.3 hours per toy at $6.80 per hour

During July, the company produced 4,900 Maze toys. The toy's production data for the month are as follows:

Direct materials: 76,000 microns were purchased at a cost of $0.29 per micron. 33,125 of these microns were still in inventory at the end of the month.

Direct labor: 6,870 direct labor-hours were worked at a cost of $50,838.

Required:

1. Compute the following variances for July: (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. Do not round intermediate calculations. Round final answer to the nearest whole dollar amount.)

a. The materials price and quantity variances.

b. The labor rate and efficiency variances.

1. Sequential Method

   Jasmine Company manufactures both pesticide and liquid fertilizer, with each product manufactured in separate departments. Three support departments support the production departments: Power, General Factory, and Purchasing. Budgeted data on the five departments are as follows:

   	Support Departments		Producing Departments
   	Power	General Factory	Purchasing	Pesticide	Liquid Fertilizer
   Overhead	$90,000	$312,000	$165,000	$78,500	$107,700
   Square feet	1,500	—	1,500	4,200	4,800
   Machine hours	—	1,403	1,345	24,000	8,000
   Purchase orders	20	40	—	120	60

   The company does not break overhead into fixed and variable components. The bases for allocation are power—machine hours; general factory—square feet; and purchasing—purchase orders.

   The company has decided to use the sequential method of allocation instead of the direct method. The support departments are ranked in order of highest cost to lowest cost.

   Required:

   1. Allocate the overhead costs to the producing departments using the sequential method. Carry out allocation ratios to four decimal places. Use these numbers for subsequent calculations. Round allocated costs to the nearest dollar. If an amount is zero, enter "0".

   Allocation ratios:

   	Power	General Factory	Purchasing	Pesticide	Liquid Fertilizer
   Square feet
   Machine hours
   Purchase orders

   Cost allocation:

   	Power	General Factory	Purchasing	Pesticide	Liquid Fertilizer
   Direct costs	$	$	$	$	$
   General Factory
   Purchasing
   Power
   Total	$	$	$	$	$

   2. Using machine hours, compute departmental overhead rates. (Round the overhead rates to the nearest cent.)

   	Overhead Rates
   Pesticide	$ per machine hour
   Liquid Fertilizer	$ per machine hour

Direct Method and Overhead Rates

Jasmine Company manufactures both pesticide and liquid fertilizer, with each product manufactured in separate departments. Three support departments support the production departments: Power, General Factory, and Purchasing. Budgeted data on the five departments are as follows:

The company does not break overhead into fixed and variable components. The bases for allocation are power—machine hours; general factory—square feet; and purchasing—purchase orders.

Required:

1. Allocate the overhead costs to the producing departments using the direct method. If required, round your allocation ratios to four decimal places and round allocated costs to the nearest dollar and use the rounded values for the subsequent calculations.

Cost assignment:

2. Using machine hours, compute departmental overhead rates. (Round the overhead rates to the nearest cent.)

On January 1, 2021, Marshall Company acquired 100 percent of the outstanding common stock of Tucker Company. To acquire these shares, Marshall issued $310,000 in long-term liabilities and 20,000 shares of common stock having a par value of $1 per share but a fair value of $10 per share. Marshall paid $24,000 to accountants, lawyers, and brokers for assistance in the acquisition and another $9,000 in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows: Marshall Company Book Value Tucker Company Book Value Cash $ 75,000 $ 38,800 Receivables 354,000 90,000 Inventory 380,000 229,000 Land 246,000 253,000 Buildings (net) 476,000 274,000 Equipment (net) 174,000 50,400 Accounts payable (241,000 ) (41,400 ) Long-term liabilities (480,000 ) (310,000 ) Common stock—$1 par value (110,000 ) Common stock—$20 par value (120,000 ) Additional paid-in capital (360,000 ) 0 Retained earnings, 1/1/21 (514,000 ) (463,800 ) Note: Parentheses indicate a credit balance. In Marshall’s appraisal of Tucker, it deemed three accounts to be undervalued on the subsidiary’s books: Inventory by $9,000, Land by $25,800, and Buildings by $32,200. Marshall plans to maintain Tucker’s separate legal identity and to operate Tucker as a wholly owned subsidiary. Determine the amounts that Marshall Company would report in its postacquisition balance sheet. In preparing the postacquisition balance sheet, any required adjustments to income accounts from the acquisition should be closed to Marshall’s retained earnings. Other accounts will also need to be added or adjusted to reflect the journal entries Marshall prepared in recording the acquisition. To verify the answers found in part (a), prepare a worksheet to consolidate the balance sheets of these two companies as of January 1, 2021.