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List of Accounts

Compute the cost of the ending inventory under the average-cost method, assuming there are 400 units on hand at the end of the period. (Round answer to 0 decimal places, e.g. 125.)

eTextbook and Media

List of Accounts

beginning inventory, purchases and sales data for the month of august are as follows beginning inventory 10 units @ 25 august 5 sale 5 units august 10 purchase 18 units @ 27 august 12 sale 13 units August 27 purchase 10 units @ 30 assuming the business maintains a perpetual inventory system, calculate the cost of goods sold and Ending inventory using FIFO, LIFO , Weighted Average

This is in response to a reply from one of the tutor's that the question was not listed. Here is the problem as indicated in the textbook:

It is chapter 3, Problem 43 of the cost accounting textbook. The Problem: Sympco Glass manufactures insulated windows. The firm's repair and maintenance (R & M) cost is mixed and varies most directly with machine hours worked. The following data have been gathered from recent operations:

The first column are the month's listed. The second column is machine hours and the third column is R & M cost.

a. Use the high-low method to estimate a cost formula for repairs and maintenance.

b. Use the least squares regression to estimate a cost formula for repairs and maintenance.

c. Does the answer to (a) or (b) provide the better estimate of the relationship between repairs and maintenance costs and machine hours? Why?

The question I have has to do with item (b) of questions 43. In the textbooks solutions, step 8 of 11 shows a table to estimate the least square regression. There are five columns. The table has the months as I provided above in one column.   Machine hours which represents (x) in the second column. The Cost which represents the (y) in the third column. The next column is xy which is a computational column where you multiply column x times column y line by line. The final column is the x squared column. This is where I am having a problem. I do not know how the figures in that column are computed. There is no explanation for that column.

Can you please advise me how that is computed because the of that column which is 36,130,000 I need to plug into the equation which is in step 10 of this problem.

Please advise.

thanks for your help.

Best regards,

Janet Napoletano

Break-even analysis for a service company Rotelco is one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 100 direct subscribers (accounts) that generated revenue of $36,300. Costs and expenses for the year were as follows: Cost of revenue $16,300 Selling, general, and administrative expenses 11,600 Depreciation 4,000 Assume that 60% of the cost of revenue and 30% of the selling, general, and administrative expenses are variable to the number of direct subscribers (accounts). In part (a) and (b), round all interim calculations and final answers to one decimal place. a. What is Rotelco's break-even number of accounts, using the data and assumptions above? Round to the nearest whole number. accounts b. How much revenue per account would be sufficient for Rotelco to break even if the number of accounts remained constant? Round to the nearest dollar. $ per account

Below are three independent situations.
1.   ABC Ltd is a manufacturer of boats and gives warranties at the time of sale to purchasers of its boats. Pursuant to the warranty terms, ABC Ltd undertakes to make good, by repair or replacement, manufacturing defects that become apparent within three years from the date of sale.
2.   ABC Ltd has a number of non-current assets, some of which require, in addition to normal ongoing maintenance, substantial expenditure on major refits/refurbishment at certain intervals or on major components that require replacement at regular intervals.
3.   XYZ Ltd is a listed company that provides food to functional centres that host events such as wedding and engagement parties. After an engagement party held by one of XYZ Ltd’s customers in May 2020, 50 people became ill, possibly as a results of food poisoning from products sold by XYZ Ltd. Legal proceedings were commenced seeking damages from XYZ Ltd. XYZ Ltd disputed liability by claiming that the functional centre was at fault for handling the food incorrectly. Up to the date of 30 June 2020 (financial year-end), XYZ Ltd’s lawyers advise that it was probable that XYZ Ltd would not be found liable.
REQUIRED:
Should a liability in the form of a provision be recorded? Briefly justify your decisions.

how will an increase in bad debt expense affect RNOA?

how will a customer paying off accounts receivable affect RNOA?

Hemming Co. reported the following current-year purchases and sales for its only product.

Required:
Hemming uses a perpetual inventory system.
  
1. Determine the costs assigned to ending inventory and to cost of goods sold using FIFO.
2. Determine the costs assigned to ending inventory and to cost of goods sold using LIFO.
3. Compute the gross margin for FIFO method and LIFO method.

Flexible Budget

In an attempt to improve budgeting, the controller for Meliore, Inc., has developed a flexible budget for overhead costs. Meliore, Inc., makes two types of products, the standard model and the deluxe model. Meliore expects to produce 300,000 units of the standard model and 120,000 units of the deluxe model during the coming year. The standard model requires 0.05 direct labor hour per unit, and the deluxe model requires 0.08. The controller has developed the following cost formulas for each of the four overhead items:

At the end of the year, Meliore, Inc., actually produced 310,000 units of the standard model and 115,000 of the deluxe model. The actual overhead costs incurred were:

Required:

Prepare a performance report for the period. If there is no variance, enter "0" for the amount and select "NA" in the last column.

Forester Company has five products in its inventory. Information about the December 31, 2021, inventory follows.

The cost to sell for each product consists of a 20 percent sales commission. The normal profit for each product is 30 percent of the selling price.

Required:
1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or market (LCM) rule is applied to individual products.

Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or market (LCM) rule is applied to individual products. (Do not round intermediate calculations.)

Deneen's Manufacturing plan had 600 adding machines on hand May 1, 2019, each costing $16 each. Purchases and sales during May:

MONTH

DENEEN DOESN'T KEEP PERPETUAL INVENTORY RECORDS. SHE COUNTED 200 ADDING MACHINES ON HAND 5/31/2019.

1. WHAT WAS THE AMOUNT OF ENDING INVENTORY AT MAY 31, 2020, AND COST OF GOODS SOLD FOR THE MONTH ENDED MAY 31, 2019, UNDER THE FIFO METHOD.

2. WHAT WAS THE AMOUNT OF ENDING INVENTORY AT MAY 31, 2020, AND COST OF GOODS SOLD FOR THE MONTH ENDED MAY 31, 2019, UNDER THE LIFO METHOD?

3. WHAT WAS THE AMOUNT OF ENDING INVENTORY AT MAY 31, 2020, AND COST OF GOODS SOLD FOR THE MONTH ENDED MAY 31, 2019, UNDER THE AVERAGE COST METHOD?.

Widget Inc. is just starting operations. Following are the first week’s financial transactions. Set up the ending B/S and the period I/S for Widget Inc.

1. Sell $10,000 worth of common stock
2. Buy 10 widgets for $100
3. Purchase $1,500 worth of equipment
4. Sell 5 widgets at $150 each to Smith on credit
5. Buy $10 widgets on credit from Jones Supply for $100 each
6. Borrow $500 from National Bank and Trust
7. Pay wages of $100
8. Pay federal tax of $20
1. Pay rent of $50
10. Pay dividends of $30
11. End of month

On 1 July 2018, River Ltd acquired 90% of the share capital to gain control of Creek Ltd. The following intra-group transactions occurred during the year ending 30 June 2019.

1. During the 2018 - 2019 period, River Ltd sold inventory to Creek Ltd for      $2,000,000. River Ltd purchased this inventory for $1,700,000. By 30 June 2019, Creek Ltd has 30% of that inventory still on hand as unsold.
2. Creek Ltd declared a final dividend of $1,500,000 from current year’s profits.                                                                                     
3. Creek Ltd paid Water River Ltd, a consultancy fee of $70,000 during the year.                                                                                   
4. River Ltd provided a loan of $10,000,000 to Creek Ltd. The loan charges 5% interest
   annually. One half of the interest for the current year remains unpaid as at
   30 June 2019.   
5. Creek Ltd sold land to River Ltd for $1,350,000. The land was purchased by Creek Ltd for $600,000.   

Prepare the journal entries required to eliminate the intra-group transactions noted above.

one homework question, split into two parts.

part 1:

A machine can be purchased for $253,000 and used for five years, yielding the following net incomes. In projecting net incomes, double-declining depreciation is applied using a five-year life and a zero salvage value.

Compute the machine’s payback period (ignore taxes). (Round payback period answer to 3 decimal places.)

part 2:

1. A new operating system for an existing machine is expected to cost $770,000 and have a useful life of six years. The system yields an incremental after-tax income of $195,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $29,000.
2. A machine costs $540,000, has a $32,000 salvage value, is expected to last eight years, and will generate an after-tax income of $78,000 per year after straight-line depreciation.

Assume the company requires a 12% rate of return on its investments. Compute the net present value of each potential investment. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

A new business client comes to your office. There are three owners of the business. The three individuals, Alan, Bob, and Carol, are thinking about forming a partnership. Alan is only investing $1 million in cash. He will not have anything to do with the daily activities of the business. Bob has had some experience in the business and will be responsible for the day-to-day operations of the business. Carol has a great deal of experience and many contacts within the business. She will be responsible for attracting new clients. Neither Bob nor Carol are investing cash into the partnership. During the first year of operation, the partnership generated a profit of $150,000. None of the partners received distributions during the year.

Specifically, the following critical elements must be addressed:

I. Allocation of Profits

     A. Explain how allocating the profits evenly between the partners would work. Consider the fairness to each of the partners in your response.
     B. What would be the value of each partner's capital account at the end of the year, given that the profits were allocated evenly among the three? Support your answer with quantitative data and an explanation of how you came to this conclusion.
     C. Explain an alternative method of allocating the profits if 80% of the profits was given to the cash investor and the remaining amount was split evenly between the other two partners.
     D. What would be the value of each partner's capital account at the end of the year, given this alternative allocation method? Support your answer with quantitative data and an explanation of how you came to this conclusion.

II. Payment of Salary

     A. Should the two partners who are working in the business receive a salary? Why or why not? Be sure to support your decision with research and quantitative data.
     B. If the two non-investors did receive a salary, how would their capital account be affected? How would this impact a potential future liquidation or buyout? Be sure to thoroughly explain and support your answer.
     C. Should the cash investor receive a higher share of the profits or other sharing options? Why or why not? Support your opinions with research and quantitative data.
     D. If the cash investor did receive a salary, how would his capital account be affected? How would this impact a potential future liquidation or buyout? Be sure to thoroughly explain and support your answer.
     E. How do the payment of salary and the allocation of profit affect entries and the financial bottom line? Be sure to support your explanation with concrete examples.
     F. How could the payment of salary and allocation of profit be a more effective method of splitting the company's profits for the three partners? Explain a scenario in which the three partners would all be compensated fairly, and support your answer with logical reasoning.
     G. What would be the value of each partner's capital account at the end of the year, given your proposed fair allocation method? Support your answer with quantitative data and an explanation of how you came to this conclusion.

The comparative balance sheet of Cookie & Coffee Creations Inc. at October 31, 2020 for the years 2020 and 2019, and the income statements for the years ended October 31, 2019 and 2020, are presented below.

COOKIE & COFFEE CREATIONS INC.

Balance Sheet

October 31

COOKIE & COFFEE CREATIONS INC.

Income Statement

Year Ended October 31

Additional information:

Natalie and Curtis are thinking about borrowing an additional $20,000 to buy more kitchen equipment. The loan would be repaid over a 4-year period. The terms of the loan provide for equal semi-annual payments of $2,500 on May 1 and November 1 of each year, plus interest of 5% on the outstanding balance.

1. Prepare a horizontal analysis of the income statement for Cookie & Coffee Creations Inc. using 2019 as a base year. Also, prepare a vertical analysis of the income statement for Cookie & Coffee Creations Inc. for 2020 and 2019.

2. Comment your findings.

3. What would justify a decision by Cookie & Coffee Creations Inc. to buy the additional equipment? What alternatives are there instead of bank financing?