Questions
Tiner Leasing Company purchased specialized equipment from Fred Company on December 31, 2019 for $800,000. On...

Tiner Leasing Company purchased specialized equipment from Fred

Company on December 31, 2019 for $800,000. On the same date, it leased this equipment to Tears Company for 6 years, the useful life of the equipment. The lease payments begin January 1, 2020 and are made every 6 months. Tiner Leasing wants to earn 9% annually on its investment.

  

   (a) Calculate the amount of each rent. $ __________

   (b) How much interest revenue will Tiner earn in 2020? $ __________

In: Accounting

The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $146,035....

The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $146,035. The bank statement indicated a balance of $181,965 on June 30, 20Y1. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:

A. Checks outstanding totaled $16,445.
B. A deposit of $9,900, representing receipts of June 30, had been made too late to appear on the bank statement.
C. The bank collected $31,800 on a $30,000 note, including interest of $1,800.
D. A check for $2,000 returned with the statement had been incorrectly recorded by Pala Medical Co. as $200. The check was for the payment of an obligation to Skyline Supply Co. for a purchase on account.
E. A check drawn for $170 had been erroneously charged by the bank as $710.
F. Bank service charges for June amounted to $75.
CHART OF ACCOUNTS
Pala Medical Co.
General Ledger
ASSETS
110 Cash
111 Petty Cash
120 Accounts Receivable
131 Notes Receivable
141 Merchandise Inventory
145 Office Supplies
146 Store Supplies
151 Prepaid Insurance
181 Land
191 Office Equipment
192 Accumulated Depreciation-Office Equipment
193 Store Equipment
194 Accumulated Depreciation-Store Equipment
LIABILITIES
211 Accounts Payable-Skyline Supply Co.
221 Notes Payable
222 Interest Payable
231 Salaries Payable
241 Sales Tax Payable
EQUITY
310 Common Stock
311 Retained Earnings
312 Dividends
313 Income Summary
REVENUE
410 Sales
610 Interest Revenue
EXPENSES
510 Cost of Merchandise Sold
515 Credit Card Expense
516 Cash Short and Over
520 Salaries Expense
531 Advertising Expense
532 Delivery Expense
533 Insurance Expense
534 Office Supplies Expense
535 Rent Expense
536 Repairs Expense
537 Selling Expenses
538 Store Supplies Expense
561 Depreciation Expense-Office Equipment
562 Depreciation Expense-Store Equipment
590 Miscellaneous Expense
710 Interest Expense

1. Prepare a bank reconciliation. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Pala Medical Co.

Bank Reconciliation

June 30, 20Y1

1

Cash balance according to bank statement

2

Adjustments:

3

4

5

6

7

8

9

Cash balance according to company’s records

10

Adjustments:

11

12

13

14

15

In: Accounting

Exercise 16-44 Comprehensive Cost Variance Analysis (LO 16-5, 6) NSF Lube is a fast-growing chain of...

Exercise 16-44 Comprehensive Cost Variance Analysis (LO 16-5, 6)

NSF Lube is a fast-growing chain of oil-change stores. The following data are available for last year’s services:

NSF Lube performed 467,700 oil changes last year. It had budgeted 435,000 oil changes, averaging 8 minutes each.

Standard variable labor and support costs per oil change were as follows:

Direct oil specialist services: 8 minutes at $30 per hour $ 4.00

Variable support staff and overhead: 10.5 minutes at $20 per hour 3.5

Fixed overhead costs: Annual budget $1,039,000

Fixed overhead is applied at the rate of $3.90 per oil change.

Actual oil change costs:

Direct oil specialist services: 467,700 changes averaging 11 minutes at $34 per hour $ 2,915,330

Variable support staff and overhead: 0.22 labor-hours at $15 per hour × 467,700 changes 1,543,410

Fixed overhead 1,425,000

a. Prepare a cost variance analysis for each variable cost for last year.

b. Prepare a fixed overhead cost variance analysis

I know the answer for b is:

Price Variance: $386,000 U

Production Volume Variance: $785,030 F

Fixed Overhead Cost Variance: $399,030 F

......But I can't figure out A: how to get the Price Variance, Efficiency Variance or the total variance for both the oil specialist and the variable overhead.

Any help would be appreciated.

In: Accounting

Toxaway Company is a merchandiser that segments its business into two divisions—Commercial and Residential. The company’s...

Toxaway Company is a merchandiser that segments its business into two divisions—Commercial and Residential. The company’s accounting intern was asked to prepare segmented income statements that the company’s divisional managers could use to calculate their break-even points and make decisions. She took the prior month’s companywide income statement and prepared the absorption format segmented income statement shown below:

Total
Company
Commercial Residential
Sales $ 1,050,000 $ 350,000 $ 700,000
Cost of goods sold 682,500 178,500 504,000
Gross margin 367,500 171,500 196,000
Selling and administrative expenses 320,000 144,000 176,000
Net operating income $ 47,500 $ 27,500 $ 20,000

In preparing these statements, the intern determined that Toxaway’s only variable selling and administrative expense is a 10% sales commission on all sales. The company’s total fixed expenses include $57,000 of common fixed expenses that would continue to be incurred even if the Commercial or Residential segments are discontinued, $90,000 of fixed expenses that would be avoided if the Commericial segment is dropped, and $68,000 of fixed expenses that would be avoided if the Residential segment is dropped.

Required:

1. Redo the intern’s segmented income statement using the contribution format.

2. Compute the companywide break-even point in dollar sales.

3. Compute the break-even point in dollar sales for the Commercial Division and for the Residential Division.

4. Assume the company decided to pay its sales representatives in the Commercial and Residential Divisions a total monthly salary of $17,500 and $35,000, respectively, and to lower its companywide sales commission percentage from 10% to 5%. Calculate the new break-even point in dollar sales for the Commercial Division and the Residential Division.

In: Accounting

All other things the same, in periods of increasing sales, net operating income will tend to...

All other things the same, in periods of increasing sales, net operating income will tend to increase more rapidly in a company with high fixed costs and low variable costs than in a company with high variable costs and low fixed costs.

In: Accounting

Kids Moving (KM), a small not-for-profit sports center is considering purchasing a new set of pitching...

Kids Moving (KM), a small not-for-profit sports center is considering purchasing a new set of pitching machines they currently rent. There will be annual maintenance on the machines that KM will now have to pay. And at the end of 5 years, the machine will be worthless and you will have to pay to have it taken away. The following data has been obtained:


Cost of equipment needed $444,444
Working capital needed (released at end of project) $20,000
Annual savings on rent not paid $180,000
Annual maintenance expense $66,666
Disposal cost at the end of the project * $8,888
cost of capital 7%
* You will have to pay $8,888 to have the machine taken away.

Complete the following questions and submit as a Microsoft EXCEL document.

Compute the NPV and the IRR of the investment.
Should the KM invest in the project?
What would your answer be if the purchase will require additional staff training all during year 1 of $11,000? (Net Present Value? IRR? Decision?)
Steps

Put in the year - Don’t forget to start with time 0 (now).
Put in the interest rate (not the tax rate– remember this is a percentage).
Skip a line.
Put in the cash inflows and outflows.
Reference the taxes if applicable.
Compute the cash flows and highlight.
Compute the PV of the cash flows (see above).
Compute the net present value by summing the PV of the cash flows from step G (do not use the NPV key).
Compute the internal rate return of the cash flows (highlighted amount).
Evaluate – consider mission, strategy and risk, ethical implications for all stakeholders.

In: Accounting

Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one...

Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five-year period. He has computed the cost and revenue estimates for each product as follows:

Product A Product B
Initial investment:
Cost of equipment (zero salvage value) $ 370,000 $ 530,000
Annual revenues and costs:
Sales revenues $ 400,000 $ 510,000
Variable expenses $ 180,000 $ 250,000
Depreciation expense $ 74,000 $ 106,000
Fixed out-of-pocket operating costs $ 85,000 $ 72,000

The company’s discount rate is 19%.

Ignore income taxes. Note that Excel or a financial calculator must be used to calculate items 2 - 4.

Required:

1. Calculate the payback period for each product.

2. Calculate the net present value for each product.

3. Calculate the internal rate of return for each product.

4. Calculate the project profitability index for each product.

6a. For each measure, identify whether Product A or Product B is preferred.

In: Accounting

On December 31, 2020, an analysis of the accounts for a company reveals the following: $100,000...

On December 31, 2020, an analysis of the accounts for a company reveals the following:

$100,000 loss on disposal of discontinued operations, before tax

$6,000 gain on sale of investments, before tax

$10,000 depreciation expense understatement in 2018 due to error, before tax

$20,000 cumulative understatement of net income of prior years from changing inventory valuation method in 2020, before tax

$168,000 income from operations, before tax

$4,000 dividends declared

The applicable income tax rate is 40% for all tax-related items. Retained earnings on December 31, 2019 were reported as $600,000.

What is ending retained earnings on December 31, 2020?

In: Accounting

spoke about auditing but specifically risk-based audit. Risk-based audit focuses on auditing controls and systems rather...

spoke about auditing but specifically risk-based audit. Risk-based audit focuses on auditing controls and systems rather than numbers.

In: Accounting

What are three FEDERAL documents in which tax-exempt organizations are REQUIRED to disclose to the public?...

What are three FEDERAL documents in which tax-exempt organizations are REQUIRED to disclose to the public?

List three characteristics of Gen Z which were described in the video, "Gen Z in the Workforce" and also explain why you agree or disagree with the characteristics described in the video.

"Regular" volunteers are volunteers which essentially fill the role of a staff position, but are not paid, employees. An example might be a volunteer driver for Meals on Wheels.

In: Accounting

1: Identify the three inventory accounts maintained by manufacturing firms and explain the purpose of each...

  1. 1: Identify the three inventory accounts maintained by manufacturing firms and explain the purpose of each - what value do they provide an organization?
  2. #2: Identify and explain the three major categories used to account for manufacturing costs as if none of us have read the chapter - in other words be detailed?

In: Accounting

Golden Ring Company produces two types of product: Large and Larger. Two work orders for two...

Golden Ring Company produces two types of product: Large and Larger. Two work orders for two batches of the products are shown below, along with some additional cost information:

Large Larger
Work Order 10 Work Order 11
Direct materials (actual costs) $45,000 $75,000
Applied conversion costs:
Mixing ? ?
Cooking $12,000 $12,000
Bottling $10,000 $15,000
Batch size (bottles) 5,000 5,000


In the Mixing Department, conversion costs are applied on the basis of direct labor hours. Budgeted conversion costs for the department for the year were $50,000 for labor and $125,000 for overhead. Budgeted direct labor hours were 2,500. It takes three minutes to mix the ingredients needed for each bottle.

Large (Work Order 10) and Larger (Work Order 11) flow through the Mixing Department first, then through the Cooking and Bottling departments.

What is Golden Ring Company's journal entry to apply conversion costs in the Mixing Department for Work Order 10?

a.

Work in Process-Mixing45,000

Materials45,000

b.

Work in Process-Mixing17,500

Conversion Costs Control17,500

c.

Conversion Costs Control17,500

Work in Process-Mixing17,500

d.

Materials45,000

Work in Process-Mixing45,000

In: Accounting

Hanks Corporation produces a single product. Operating data for the company and its absorption costing income...

Hanks Corporation produces a single product. Operating data for the company and its absorption costing income statements for the last two years are presented below:

Year 1

Year 2

Units in beginning inventory

0

1,000

Units produced

9,000

9,000

Units sold

8,000

10,000

Year 1

Year 2

Sales

$80,000

$100,000

Cost of goods sold

48,000

  60,000

Gross margin

32,000

40,000

Selling and administrative expenses

28,000

  30,000

Net operating income

$4,000

$10,000

Variable manufacturing costs are $4 per unit. Fixed manufacturing overhead was $18,000 in each year. This fixed manufacturing overhead was applied at a rate of $2 per unit. Variable selling and administrative expenses were $1 per unit sold.

Required:

a. Compute the unit product cost in each year under variable costing.

b. Prepare new income statements for each year using variable costing.

c. Reconcile the absorption costing and variable costing net operating income for each year.

In: Accounting

Combat Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a...

Combat Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a commercial fire extinguisher. The home model is a high-volume (54,000 units), half-gallon cylinder that holds 2 1/2 pounds of multi-purpose dry chemical at 480 PSI. The commercial model is a low-volume (10,200 units), two-gallon cylinder that holds 10 pounds of multi-purpose dry chemical at 390 PSI. Both products require 1.5 hours of direct labor for completion. Therefore, total annual direct labor hours are 96,300 or [1.5 hours × (54,000 + 10,200)]. Estimated annual manufacturing overhead is $1,569,238. Thus, the predetermined overhead rate is $ 16.30 or ($ 1,569,238 ÷ 96,300) per direct labor hour. The direct materials cost per unit is $18.50 for the home model and $26.50 for the commercial model. The direct labor cost is $19 per unit for both the home and the commercial models.

The company’s managers identified six activity cost pools and related cost drivers and accumulated overhead by cost pool as follows.

Estimated Use of
Drivers by Product

Activity Cost Pools

Cost Drivers   

Estimated Overhead

Estimated Use of
Cost Drivers

Home

Commercial

Receiving Pounds

$ 83,750

335,000

215,000

120,000

Forming Machine hours

155,050

35,000

27,000

8,000

Assembling Number of parts

403,620

217,000

165,000

52,000

Testing Number of tests

44,880

25,500

15,500

10,000

Painting Gallons

57,838

5,258

3,680

1,578

Packing and shipping Pounds

824,100

335,000

215,000

120,000

$ 1,569,238

(a)

Under traditional product costing, compute the total unit cost of each product. (Round answers to 2 decimal places, e.g. 12.50.)

Home Model

Commercial Model

Total unit cost

$ (enter a dollar amount rounded to 2 decimal places)

$ (enter a dollar amount rounded to 2 decimal places)

2.)Under ABC, complete the schedule showing the computations of the activity-based overhead rates (per cost driver). (Round your answers to 2 decimal places, e.g. 2.25.)

3.)Complete the schedule assigning each activity's overhead cost pool to each product based on the use of cost drivers. (Use rates from part b above and round cost assigned to 0 decimal places, e.g. 12,250. Round overhead per unit to 2 decimal places, e.g. 2.25. Note that due to rounding your total cost assigned will be slightly different than calculated above.)
Cost Driver Home Model
Commercial Model
Cost Assigned

4.) Compute the total cost per unit for each product under ABC. (Round your answers to 2 decimal places, e.g. 12.25.)
Home Model $
Commercial Model $

5.)Classify each of the activities as a value-added activity or a non-value-added activity.
Activity
Receiving value-addednon-value-added
Forming non-value-addedvalue-added
Assembling value-addednon-value-added
Testing value-addednon-value-added
Painting non-value-addedvalue-added
Packing and shipping value-addednon-value-added

In: Accounting

Borunda Corporation has provided the following data for its two most recent years of operation: Selling...

Borunda Corporation has provided the following data for its two most recent years of operation:

Selling price per unit

$83

Manufacturing costs:

Variable manufacturing cost per unit produced:

Direct materials

$9

Direct labor

$7

Variable manufacturing overhead

$3

Fixed manufacturing overhead per year

$360,000

Selling and administrative expenses:

Variable selling and administrative expense per unit sold

$6

Fixed selling and administrative expense per year

$77,000

Year 1

Year 2

Units in beginning inventory

0

2,000

Units produced during the year

10,000

12,000

Units sold during the year

8,000

12,000

Units in ending inventory

2,000

2,000

Required:

a. Assume the company uses absorption costing. Prepare an income statement for each year.

b. Assume the company uses variable costing. Prepare an income statement for each year.

c. Prepare a report in good form reconciling the variable costing and absorption costing net incomes.

In: Accounting