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:
| Fixed Component per Month |
Variable Component per Job |
Actual Total for February |
|||||||
| Revenue | $ | 360 | $ | 18,950 | |||||
| Technician wages | $ | 6,400 | $ | 6,450 | |||||
| Mobile lab operating expenses | $ | 2,900 | $ | 35 | $ | 4,530 | |||
| Office expenses | $ | 2,600 | $ | 2 | $ | 3,050 | |||
| Advertising expenses | $ | 970 | $ | 995 | |||||
| Insurance | $ | 1,680 | $ | 1,680 | |||||
| Miscellaneous expenses | $ | 500 | $ | 3 | $ | 465 | |||
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $2,900 plus $35 per job, and the actual mobile lab operating expenses for February were $4,530. The company expected to work 50 jobs in February, but actually worked 52 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.)
In: Accounting
|
BLOSSOM INC. |
||||||
|
12/31/17 |
12/31/16 |
|||||
| Cash |
$5,900 |
$6,900 |
||||
| Accounts receivable |
61,400 |
50,800 |
||||
| Short-term debt investments (available-for-sale) |
35,000 |
17,800 |
||||
| Inventory |
40,000 |
59,400 |
||||
| Prepaid rent |
5,000 |
3,900 |
||||
| Equipment |
155,200 |
129,000 |
||||
| Accumulated depreciation—equipment |
(35,000 |
) |
(25,000 |
) |
||
| Copyrights |
45,600 |
49,900 |
||||
| Total assets |
$313,100 |
$292,700 |
||||
| Accounts payable |
$46,300 |
$39,800 |
||||
| Income taxes payable |
3,900 |
6,100 |
||||
| Salaries and wages payable |
7,900 |
3,900 |
||||
| Short-term loans payable |
8,000 |
10,100 |
||||
| Long-term loans payable |
60,100 |
68,400 |
||||
| Common stock, $10 par |
100,000 |
100,000 |
||||
| Contributed capital, common stock |
30,000 |
30,000 |
||||
| Retained earnings |
56,900 |
34,400 |
||||
| Total liabilities & stockholders’ equity |
$313,100 |
$292,700 |
||||
|
BLOSSOM INC. |
||||
| Sales revenue |
$338,600 |
|||
| Cost of goods sold |
174,500 |
|||
| Gross profit |
164,100 |
|||
| Operating expenses |
119,100 |
|||
| Operating income |
45,000 |
|||
| Interest expense |
$11,400 |
|||
| Gain on sale of equipment |
1,900 |
9,500 |
||
| Income before tax |
35,500 |
|||
| Income tax expense |
7,100 |
|||
| Net income |
$28,400 |
|||
Additional information:
| 1. | Dividends in the amount of $5,900 were declared and paid during 2017. | |
| 2. | Depreciation expense and amortization expense are included in operating expenses. | |
| 3. | No unrealized gains or losses have occurred on the investments during the year. | |
| 4. | Equipment that had a cost of $20,100 and was 70% depreciated was sold during 2017 |
prepare a statement of cash flows using direct method
In: Accounting
Write a short report (220–250 words) on the business needs and expectations of a bookkeeper, comparing the role of the bookkeeper with that of an accountant.
In: Accounting
In: Accounting
| The income statement of Rodriquez Company is shown below: | ||||||
| RODRIQUEZ COMPANY | ||||||
| Income Statement | ||||||
| For The Year Ended December 31, 2012 | ||||||
| Sales | $6,900,000 | |||||
| Cost of goods sold | ||||||
| Beginning inventory | $1,900,000 | |||||
| Purchases | 4,400,000 | |||||
| Goods available for sale | 6,300,000 | |||||
| Ending inventory | 1,600,000 | |||||
| Cost of goods sold | 4,700,000 | |||||
| Gross profit | 2,200,000 | |||||
| Operating expenses | ||||||
| Selling expenses | 450,000 | |||||
| Administrative expenses | 700,000 | 1,150,000 | ||||
| Net income | $1,050,000 | |||||
| Additional information: | ||||||
| 1. Accounts receivable decreased | $310,000 | during the year. | ||||
| 2. Prepaid expenses increased | $170,000 | during the year. | ||||
| 3. Accounts payable to suppliers of merchandise decreased | $275,000 | during the year. | ||||
| 4. Accrued expenses payable decreased | $120,000 | during the year. | ||||
| 5. Administrative expenses include depreciation expense of | $60,000 | |||||
| Instructions: | ||||||
|
Prepare the operating activities section of the statement of cash
flows for the year ended December 31, 2012, for Rodriquez Company, using the direct method. |
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In: Accounting
Terry company's 2017 income statement and comparative balance sheets at December 31 of 2016 and 2017are shown.
Terry Company
Income Statement
For the year Ended December 31, 2017
Sales $ 390,000
Cost of Goods Sold 235,000
_______
Gross Profit $ 155,000
Wages Expenses $ 63,000
Depreciation Expense 14,000
Other Operating Expenses 26,000
Income Tax Expense 17,000 120,000
______ ________
Net Income $ 35,000
Terry Company
Balance Sheets
Dec. 31, Dec. 31,
Assets 2016 2017
Cash $ 16,000 $ 30,000
Accounts Receivable (net) 28,000 35,000
Inventory 110,000 84,000
Prepaid Expense 12,000 8,000
Plant Assets 178,000 130,000
Accumulated Depreciation (76,000) (62,000)
Total Assets $ 268,000 $ 225,000
Liabilities and Stockholders' Equity
Accounts Payable $ 27,000 $ 14,000
Wages Payable 6,000 2,500
Income Tax Payable 3,000 4,500
Common Stock 135,000 125,000
Retained Earnings 97,000 79,000
________ _________
Total Liabilities and $ 268,000 $ 225,000
Stockholders' Equity
Cash dividends of $17,000 were declared and paid during 2016 Plant assets of $48,000 were purchased for cash, and later in the year, an additional $10,000 common stock was issued for cash
REQUIRED
Prepare only the Cash Flows from Operations section of the Cash Flow Statement using the
indirect method.
Reminder: you need only prepare the Cash Flow from Operations section of the statement
In: Accounting
| The comparative balance sheets for Hinckley Corporation show the following information: | ||||||
| December 31 | ||||||
| 2012 | 2011 | |||||
| Cash | $33,500 | $13,000 | ||||
| Accounts receivable | 12,250 | 10,000 | ||||
| Inventory | 12,000 | 9,000 | ||||
| Investments | 0 | 3,000 | ||||
| Building | 0 | 29,750 | ||||
| Equipment | 45,000 | 20,000 | ||||
| Patent | 5,000 | 6,250 | ||||
| Totals | $107,750 | $91,000 | ||||
| Allowance for doubtful accounts | $3,000 | $4,500 | ||||
| Accumulated depreciation on equipment | 2,000 | 4,500 | ||||
| Accumulated depreciation on building | 0 | 6,000 | ||||
| Accounts payable | 5,000 | 3,000 | ||||
| Dividends payable | 0 | 5,000 | ||||
| Notes payable, short-term (nontrade) | 3,000 | 4,000 | ||||
| Long-term notes payable | 31,000 | 25,000 | ||||
| Common stock | 43,000 | 33,000 | ||||
| Retained earnings | 20,750 | 6,000 | ||||
| Totals | $107,750 | $91,000 | ||||
| Additional data related to 2012 are as follows: | ||||||
| 1. Equipment that had cost | $11,000 | and was | 40% | depreciated at time of | ||
| disposal was sold for | $2,500 | |||||
| 2. | $10,000 | of the long-term note payable was paid by issuing common stock. | ||||
| 3. Cash dividends paid were | $5,000 | |||||
| 4. On January 1, 2012, the building was completely destroyed by a flood. Insurance proceeds | ||||||
| on the building were | $30,000 | (net of | $2,000 | taxes). | ||
| 5. Investments (available-for-sale) were sold at | $1,700 | above their cost. The | ||||
| company has made similar sales and investments in the past. | ||||||
| 6. Cash of was paid for the acquisition of equipment. | ||||||
| 7. A long-term note for | $16,000 | was issued for the acquisition of equipment. | ||||
| 8. Interest of | $2,000 | and income taxes of | $6,500 | were paid in cash. | ||
| Instructions: | ||||||
|
Prepare a statement of cash flows using the indirect method. Flood damage is unusual and infrequent in that part of the country. |
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In: Accounting
Zippy Shoe Co. uses a periodic inventory system. Zippy purchased 430 pairs of shoes at $69 each in June, 990 pairs in August at $71 each, and 620 pairs in December at $74 each. Zippy sold 1,895 pairs of shoes during the year.
Required:
Calculate the company's ending inventory and cost of goods sold
using the each of following inventory costing methods.
In: Accounting
On January 1 Criquet Co. acquired an interest in the Tamlee Co. for $500,000. At December 31, Tamlee Co. declared and paid a cash dividend of $50,000 and reported a net income of $160,000.
REQUIRED:
Prepare the journal entries for the Criquet Co. under each of the independent circumstances:
a. Criquet Co. acquires a 10% interest in the Tamlee Co.
b. Criquet Co. acquires a 25% interest in the Tamlee Co.
In: Accounting
| Financial data for Joel de Paris, Inc., for last year follow: |
| Joel de Paris, Inc. Balance Sheet |
||||
| Beginning Balance |
Ending Balance |
|||
| Assets | ||||
| Cash | $ | 137,000 | $ | 132,000 |
| Accounts receivable | 337,000 | 475,000 | ||
| Inventory | 572,000 | 488,000 | ||
| Plant and equipment, net | 814,000 | 805,000 | ||
| Investment in Buisson, S.A. | 405,000 | 428,000 | ||
| Land (undeveloped) | 250,000 | 248,000 | ||
| Total assets | $ | 2,515,000 | $ | 2,576,000 |
| Liabilities and Stockholders' Equity | ||||
| Accounts payable | $ | 375,000 | $ | 336,000 |
| Long-term debt | 1,018,000 | 1,018,000 | ||
| Stockholders' equity | 1,122,000 | 1,222,000 | ||
| Total liabilities and stockholders' equity | $ | 2,515,000 | $ | 2,576,000 |
| Joel de Paris, Inc. Income Statement |
|||
| Sales | $ | 4,512,000 | |
| Operating expenses | 3,835,200 | ||
| Net operating income | 676,800 | ||
| Interest and taxes: | |||
| Interest expense | $ 121,000 | ||
| Tax expense | 202,000 | 323,000 | |
| Net income | $ | 353,800 | |
|
The company paid dividends of $253,800 last year. The “Investment in Buisson, S.A.,” on the balance sheet represents an investment in the stock of another company. |
| Required: | |
| 1. |
Compute the company’s margin, turnover, and return on investment (ROI) for last year.(Round your answers to 2 decimal places.) |
| 2. |
The board of directors of Joel de Paris, Inc., has set a minimum required rate of return of 14%. What was the company’s residual income last year? |
In: Accounting
Weller Company's budgeted unit sales for the upcoming fiscal year are provided below:
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |
| Budgeted unit sales | 16,000 | 18,000 | 15,000 | 14,000 |
The company’s variable selling and administrative expense per unit is $1.50. Fixed selling and administrative expenses include advertising expenses of $9,000 per quarter, executive salaries of $35,000 per quarter, and depreciation of $15,000 per quarter. In addition, the company will make insurance payments of $4,000 in the first quarter and $4,000 in the third quarter. Finally, property taxes of $6,000 will be paid in the second quarter.
Required:
Prepare the company’s selling and administrative expense budget for the upcoming fiscal year. (Round "Per Unit" answers to 2 decimal places.)
In: Accounting
Direct Materials Variances
Bellingham Company produces a product that requires six standard pounds per unit. The standard price is $10.5 per pound. If 6,200 units used 37,900 pounds, which were purchased at $10.08 per pound, what is the direct materials (a) price variance, (b) quantity variance, and (c) cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| a. Direct materials price variance | $ | |
| b. Direct materials quantity variance | $ | |
| c. Direct materials cost variance | $ |
Direct Labor Variances
Bellingham Company produces a product that requires 10 standard direct labor hours per unit at a standard hourly rate of $19.00 per hour. If 6,400 units used 65,300 hours at an hourly rate of $18.05 per hour, what is the direct labor (a) rate variance, (b) time variance, and (c) cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| a. Direct labor rate variance | $ | |
| b. Direct labor time variance | $ | |
| c. Direct labor cost variance | $ |
In: Accounting
Discuss the following two statements:
1- the corporate charter and the bylaws of a company are legal documents; therefore, they should not be examined by the auditors. If the auditor wants information about these documents, an attorney should be consulted.
2- the most important audit procedure to verify dividends for the year is a comparison of a random sample of cancelled dividends checks with a dividend list that has been prepared by management as of the dividend record date.
In: Accounting
Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company’s inventory balances were as follows:
| Raw materials | $ | 63,000 | |
| Work in process | $ | 22,200 | |
| Finished goods | $ | 52,500 | |
The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company’s predetermined overhead rate of $11.50 per direct labor-hour was based on a cost formula that estimated $460,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year:
4. What is the total amount of manufacturing overhead applied to production during the year?
5. What is the total manufacturing cost added to Work in Process during the year?
6. What is the journal entry to record the transfer of completed jobs that is referred to in item g above?
7. What is the ending balance in Work in Process?
In: Accounting
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments—Molding and Fabrication. It started, completed, and sold only two jobs during March—Job P and Job Q. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March):
| Molding | Fabrication | Total | |||||||
| Estimated total machine-hours used | 2,500 | 1,500 | 4,000 | ||||||
| Estimated total fixed manufacturing overhead | $ | 13,500 | $ | 17,100 | $ | 30,600 | |||
| Estimated variable manufacturing overhead per machine-hour | $ | 2.80 | $ | 3.60 | |||||
| Job P | Job Q | |||||
| Direct materials | $ | 27,000 | $ | 15,000 | ||
| Direct labor cost | $ | 32,200 | $ | 13,100 | ||
| Actual machine-hours used: | ||||||
| Molding | 3,100 | 2,200 | ||||
| Fabrication | 2,000 | 2,300 | ||||
| Total | 5,100 | 4,500 | ||||
Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month.
Required:
For questions 1-8, assume that Sweeten Company uses a plantwide predetermined overhead rate with machine-hours as the allocation base. For questions 9-15, assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments.
11. How much manufacturing overhead was applied from the Fabrication Department to Job P and how much was applied to Job Q?
12. If Job P included 20 units, what was its unit product cost?
13. If Job Q included 30 units, what was its unit product cost?
14. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis assuming 20 units were produced for Job P and 30 units were produced for Job Q?
15. What was Sweeten Company’s cost of goods sold for March?
In: Accounting