On January 1, 2018, Taco King leased retail space from Fogelman Properties. The 10-year finance lease requires quarterly variable lease payments equal to 3% of Taco King’s sales revenue, with a quarterly sales minimum of $460,000. Payments at the beginning of each quarter are based on previous quarter sales. During the previous 5-year period, Taco King has generated quarterly sales of over $680,000. Fogelman’s interest rate, known by Taco King, was 4%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entries for Taco King at the beginning of the lease at January 1, 2018. 2. Prepare the journal entries for Taco King at April 1, 2018. First quarter sales were $690,000. Amortization is recorded quarterly.

Cast Iron Grills, Inc., manufactures premium gas barbecue grills. The company reports inventory and cost of goods sold based on calculations from a LIFO periodic inventory system. Cast Iron’s December 31, 2021, fiscal year-end inventory consisted of the following (listed in chronological order of acquisition):

The replacement cost of the grills throughout 2022 was $700. Cast Iron sold 34,000 grills during 2022. The company's selling price is set at 200% of the current replacement cost.

Required:
1. & 2. Compute the gross profit (sales minus cost of goods sold) and the gross profit ratio for 2022 under two different assumptions. First, that Cast Iron purchased 35,000 units and, second, that Cast Iron purchased 18,500 units during the year.
4. Compute the gross profit (sales minus cost of goods sold) and the gross profit ratio for 2022 assuming that Cast Iron purchased 35,000 units (as per the first assumption) and 18,500 units (as per the second assumption) during the year and uses the FIFO inventory cost method rather than the LIFO method.

Cost of Goods Manufactured for a Manufacturing Company

Two items are omitted from each of the following three lists of cost of goods manufactured statement data. Determine the amounts of the missing items, identifying them by letter.

United States Motors Inc. (USMI) manufactures automobiles and light trucks and distributes them for sale to consumers through franchised retail outlets. As part of the franchise agreement, dealerships must provide monthly financial statements following the USMI accounting procedures manual. USMI has developed the following financial profile of an average dealership that sells 3,100 new vehicles annually:

USMI is considering a major expansion of its dealership network. The vice president of marketing has asked Jack Snyder, corporate controller, to develop some measure of the risk associated with the addition of these franchises. Jack estimates that 90% of the mixed costs shown are variable for purposes of this analysis. He also suggests performing regression analyses on the various components of the mixed costs to more definitively determine their variability.

Required:

1. Calculate the composite dealership profit if 4,400 units are sold.

3. The regression equation that Jack Snyder developed to project annual sales of a dealership has an R-squared of 60% and a standard error of the estimate of $9,300,000. If the projected annual sales for a dealership total $58,900,000, determine the approximate 95% confidence interval for Jack’s prediction of sales. (Hint: The 95% confidence interval uses 2 standard errors in determining the interval.)

The following information relates to YogaGuru for the year ended 30 June 2020.

Required: Prepare an Income Statement , a fully classified Balance Sheet in narrative format and a Statement of Changes in Equity for the year ended 30 June 2020 for YogaGuru.

Income Statement:

Fully narrative Balance Sheet:

Statement of Changes in Equity

Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $120 per unit. Variable expenses are $60.00 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows:

Required:

Answer each question independently based on the original data:

1. What is the product's CM ratio?

2. Use the CM ratio to determine the break-even point in dollar sales.

3. If this year's sales increase by $59,000 and fixed expenses do not change, how much will net operating income increase?

4-a. What is the degree of operating leverage based on last year's sales?

4-b. Assume the president expects this year's sales to increase by 13%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize this year?

5. The sales manager is convinced that a 12% reduction in the selling price, combined with a $69,000 increase in advertising, would increase this year's unit sales by 25%.

a. If the sales manager is right, what would be this year's net operating income if his ideas are implemented?

b. Do you recommend implementing the sales manager's suggestions?

6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $2.30 per unit. He thinks that this move, combined with some increase in advertising, would increase this year's sales by 25%. How much could the president increase this year's advertising expense and still earn the same $1,440,000 net operating income as last year? Do not prepare an income statement; use the incremental analysis approach.

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 30,000 of these balls, with the following results:

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, $90,000, 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, $90,000, as last year?

b. Assume the new plant is built and that next year the company manufactures and sells 30,000 balls (the same number as sold last year). Prepare a contribution format income statement and Compute the degree of operating leverage.

Case 2: Sam’s Paint and Drywall

Questions:

1. Determine each of the 5 ratios listed in the table below. Note also that a list of ratios and the equations are included in this document (at the end).
2. Evaluate each ratio against Dun and Bradstreet’s Key Business Ratios on industry norms (given on the following page).

1

Palmer Hand Clinic has the following accounts and balances:

Cash, $2,350
Accounts Receivable, $280
Professional Equipment, $1,200
Office Equipment, $6,700
Accounts Payable, $4,380
P. Palmer, Capital, $2,000
Income from Services, $6,000
Rent Expense, $1,850

What is the amount of owner's equity?

a.$6,150

b.$4,150

c.$8,000

d.$2,000

2

Which of the following is an example of an asset?

a.Accounts Payable

b.Outstanding Rent

c.Prepaid Insurance

d.Capital

3

When an owner withdraws cash from the business, it results in a decrease in:

a.Cash and Long-term Liabilities.

b.Cash and Contingent Liabilities.

c.Cash and Accounts Payable.

d.Cash and Accounts Receivable.

e.Cash and Capital.

4

If an owner invests his or her computer, printer, and cash in the business, there is an increase in:

a.Computer Equipment, Cash, and Capital.

b.Cash and Accounts Payable.

c.Cash and Drawing.

d.Computer Equipment, Accounts Payable, and Drawing.

e.Computer Equipment and Expenses.

5

Magna Company paid $2,400 for a 6-month liability insurance policy. At the time of payment, this transaction should be recorded as

a.Insurance Expense, $400.

b.Insurance Expense, $2,400.

c.Prepaid Insurance, $2,400.

d.Prepaid Insurance, $400.

6

The purchase of an asset (like Equipment) on account will

a.increase total liabilities and decrease total assets.

b.increase total assets and increase total liabilities.

c.increase total assets and increase owner's equity.

d.have no effect on total assets or total liabilities.

e.increase total assets and decrease owner's equity.

7

Petkus Company paid Perkins Products, a creditor, on account, $7,500. What are the effects on the fundamental account equation?

a.Assets increase $7,500; liabilities decrease $7,500; owner's equity, no effect.

b.Assets decrease $7,500; liabilities, no effect; owner's equity decreases $7,500.

c.Assets increase $7,500; liabilities, no effect; owner's equity increases $7,500.

d.Assets decrease $7,500; liabilities decrease $7,500; owner's equity, no effect.

8

Jamie's Lighting Company paid rent for the month, $2,500. What are the effects on the fundamental accounting equation?

a.Assets increase $2,500; liabilities, no effect; owner's equity increases $2,500.

b.Assets decrease $2,500; liabilities, decrease $2,500; owner's equity, no effect.

c.Assets decrease $2,500; liabilities, no effect; owner's equity increases $2,500.

d.Assets decrease $2,500; liabilities, no effect; owner's equity decreases $2,500.

What are the alternatives available for accounting for inventory and advertising?

Please answer to the point and accurate and please do not copy someone else.. Please don't go for length, 200-300 words will be fine but please very accurate and very careful. I will be very much thankful. I am preperation for exam and it is tough for me.

1. Explain why companies do not consolidate all subsidiaries

Analysis a recent ethics scandal, your report should discuss the conditions that gave rise to unethical business strategies and behavior and provide an overview of the costs resulting from the company's business ethics failure.

Please provide answers.

5. The declaration and payment of cash dividends

a.reduces the amount of resources a company has to invest in productive assets.

b.sometimes does not reduce a company's cash balance.

c.sometimes does not reduce a company's retained earnings balance.

d.reduces a company's net income.

6. The declaration of a common cash dividend

a.decreases the number of shares of outstanding stock.

b.decreases a company's retained earnings balance.

c.decreases the amount of cash.

d.decreases the par value of outstanding stock.

7. When do cash dividends become liabilities?

a.On the payment date.

b.On the date of record.

c.On the declaration date.

d.Cash dividends are never liabilities because a company is not legally required to pay cash dividends.

8. Which of the following statements about retained earnings is true?

a.It is the amount of corporate earnings that have been reinvested in the business.

b.It is the amount of creditors' claims on assets.

c.It is increased when treasury stock is bought.

d.It is the amount of cash that has been retained from a company's earnings.

9. Which of the following is NOT an important date associated with dividends?

a.Declaration date

b.Dividend payment date

c.Date of record

d.Date of information

10. During the year, Trenton Company purchased 3,000 shares of its $10 par common stock at $50 per share and later sold it for $40 per share. How much did total equity change because of these treasury stock transactions?

a.$150,000 decrease

b.$120,000 increase

c.$20,000 decrease

d.$30,000 decrease

11. Moony Corporation had 20,000 shares of $4 par-value common stock outstanding on January 1, 2018. On January 10, 2018, the firm purchased 2,000 of its outstanding shares for $18 per share. On July 22, 2018, it reissued 1,000 shares at $22 per share. Given this information, the entry to record the reissuing of the remaining 1,000 shares on August 17, 2018, at $12 per share would probably include a

a.credit to treasury stock of $4,000.

b.debit to paid-in capital, treasury stock of $6,000.

c.debit to loss on sale of stock of $6,000.

d.debit to retained earnings of $2,000.

12. Moony Corporation had 20,000 shares of $4 par-value common stock outstanding on January 1, 2018. On January 10, 2018, the firm purchased 2,000 of its outstanding shares for $18 per share. On July 22, 2018, it reissued 1,000 shares at $22 per share. Given this information, the entry to record the reissuance of the stock on July 22 would include a credit to

a.paid-in capital, treasury stock of $4,000.

b.common stock of $4,000.

c.paid-in capital, $18,000.

d.treasury stock of $4,000.

13. Moony Corporation had 20,000 shares of $4 par-value common stock outstanding on January 1, 2018. On January 10, 2018, the firm purchased 2,000 of its outstanding shares for $18 per share. On July 22, 2018, it reissued 1,000 shares at $22 per share. Given this information, the entry to record the purchase of this stock on January 10 would include a debit to

a.treasury Stock of $8,000.

b.treasury Stock of $36,000.

c.common Stock of $8,000.

d.common Stock of $36,000.

14. At the beginning of the year, Brandt Company issued 5,000 shares of $1 par common stock in exchange for land with a book value of $130,000 and a fair value of $100,000. The market value of the stock at the date of the transaction was $20 per share. The entry to record this transaction would include a

a.credit to common stock for $100,000.

b.debit to common stock for $5,000.

c.credit to paid-in capital in excess of par, common stock of $95,000.

d.debit to land of $130,000.

15. At the beginning of the year, Salina Company issued 10,000 shares of no par common stock for $100 each. The journal entry to record this transaction would include a

a.credit to common stock of $1,000,000.

b.credit to cash of $1,000,000.

c.debit to common stock of $1,000,000.

d.debit to cash of $20,000.

16. On January 1, 2018, Georgi Company was authorized to issue 10,000 shares of $2 par common stock and 5,000 shares of $5 par preferred stock. Given this information, if Georgi Company issued 2,000 shares of preferred stock for $20 per share on January 31, 2018, the entry to record the issuance of the stock would include a

a.credit to preferred stock of $40,000.

b.credit to paid-in capital in excess of par, preferred stock of $10,000.

c.debit to cash of $30,000.

d.debit to cash of $40,000.

Problem 12-18 Allocation to accomplish smoothing LO 12-1, 12-2, 12-3

Walton Corporation estimated its overhead costs would be $22,200 per month except for January when it pays the $155,700 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $177,900 ($155,700 + $22,200). The company expected to use 7,900 direct labor hours per month except during July, August, and September when the company expected 9,800 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season. The company’s actual direct labor hours were the same as the estimated hours. The company made 3,950 units of product in each month except July, August, and September, in which it produced 4,900 units each month. Direct labor costs were $23.40 per unit, and direct materials costs were $10.50 per unit.

Required

1. Calculate a predetermined overhead rate based on direct labor hours.

2. Determine the total allocated overhead cost for January, March, and August.

3. Determine the cost per unit of product for January, March, and August.

4. Determine the selling price for the product, assuming that the company desires to earn a gross margin of $21.70 per unit.

Question 12

A comparative balance sheet for Rocker Company appears below:

*Prepare a statement of cash flows for the year ended December 31, 2020, using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)