Bonadio Electrical Supplies distributes electrical components to the construction industry. The company began as a local supplier 15 yrs ago and has grown rapidly to become a major competitor in the North central U.S. As the business grew and variety of components to be stocked expanded, Bonadio acquired a computer and implemented an inventory control system. Other applications such as accounts receivable, account payable, payroll, and sale analysis were gradually computerized as each function expanded. Because of its operational importance, the inventory system has been upgraded to an online system, while all the other applications are operating in batch mode. Over the years, the company has developed or acquired more than 100 application programs and maintains hundreds of files. Bonadio faces stiff competition from local suppliers throughout its marketing area. At a management meeting, the sales manager complained about the difficulty obtaining immediate, current information to respond to customer inquiries. Other managers states that they also had difficulty obtaining timely data from the system. As the result, the controller engaged a consulting firm to explore the situation. The consultant recommended installing a database management system (DBSM), and the company complied, employing Jack Gibbons as the database administrator.

At a recent management meeting, Gibbons presented an overview of the DBMS. Gibbons explained that the databases approach assumes an organizational, data oriented viewpoint as it recognizes that a centralized database represents a vital resource. Instead of being assigned to applications, information is more appropriately used and managed for the entire organization. The operating system physically moves data to and from disk storage, while the DBMS is the software program that controls the data definition library that specifies the data structures and characteristics. As the result. both the roles of the application programs and query software and the tasks of the application programers and users are simplified. Under the database approach, the data are available to all users within security guidelines.

a. Explain the basic difference between a file-oriented system and database management system.

b. Describe at least 3 advantages and at least 3 disadvantages of the database management system.

c. Describe the duties and responsibilities of Jack Gibbons, the database administrator. (CMA Adapted)

Back in Boston, Steve has been busy creating and managing his new company, Teton Mountaineering (TM), which is based out of a small town in Wyoming. In the process of doing so, TM has acquired various types of assets. Below is a list of assets acquired during 2016: Exhibit 10-8 (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Round intermediate calculations and final answer to the nearest whole dollar amount.)

* Not considered a luxury automobile, thus not subject to the luxury automobile limitations.

During 2016, TM had huge success (and had no §179 limitations) and Steve acquired more assets the next year to increase its production capacity. These are the assets acquired during 2017:

^†Used 100% for business purposes.

TM generated taxable income in 2017 of $732,500 for purposes of computing the §179 expense.

a. Compute the maximum 2016 depreciation deductions including §179 expense (ignoring bonus depreciation).

b. Compute the maximum 2017 depreciation deductions including §179 expense (ignoring bonus depreciation).

c. Compute the maximum 2017 depreciation deductions including §179 expense, but now assume that Steve would like to take bonus depreciation on the 2017 assets.

d. Ignoring part c, now assume that during 2017, Steve decides to buy a competitor’s assets for a purchase price of $350,000. Compute the maximum 2017 cost recovery including §179 expense (ignoring bonus depreciation). Steve purchased the following assets for the lump-sum purchase price.

Question 4

1. Explain the difference between financial accounting and management accounting.

Ensure your explanation clearly explains the purpose of management accounting.

2. Car Services Ltd produces custom tow bars and bull bars for utes and cars. Each customer’s order is treated as a separate job so costs can be tracked for each customer.

Tasks

Briefly explain the following:

1. The meaning of the term cost object. Identify the cost object that would be used by Car Services Ltd when recording costs.
2. The difference between a direct cost and an indirect cost. Identify examples of both direct costs and indirect costs for the cost object.

3. Salmon Ltd provides you with the following information on the costs of testing the water quality of their wastewater.

Task

Using the high low method, calculate the fixed cost per month and the variable cost per test.

d) King Ltd uses a job costing system. The company’s budget for the year included a budgeted total manufacturing overhead cost of $1,800,000 and budgeted total direct labour hours of 60,000 hours. Manufacturing overhead cost is applied to jobs based on direct labour-hours worked. During December, King Ltd started and completed one manufacturing job (Job 571). The events of December are:

Tasks

1. Calculate the total cost of Job 571.
2. Determine the amount by which the manufacturing overhead cost is overapplied or underapplied for December.

Maple Trump Winery requested that you determine whether the company's ability to pay its current liabilities and long-term debts improved or deteriorated during 2018.

To answer this question, compute the following ratios for 2018 and 2017 :

(a) current ratio, (b) quick ratio, (c) debt ratio, and (d) interest coverage ratio. Round all ratios to two decimal places. Summarize the results of your analysis.

To answer this​ question, compute the following ratios for 2018 and 2017​:

​(a) current​ ratio, (b) quick​ ratio, (c) debt​ ratio, and​ (d) interest-coverage ratio. Round all ratios to two decimal places. ​(Abbreviations used: Avg​ = Average, EBIT​ = Earnings before interest and​ taxes, LT​ = Long-term, and ST​ = Short-term.)

Begin with a. current ratio.

Select the formula and then enter the amounts to calculate the current ratios.

Presented below are changes in all the account balances of Wildhorse Furniture Co. during the current year, except for retained earnings.

Compute the net income for the current year, assuming that there were no entries in the Retained Earnings account except for net income and a dividend declaration of $28,270 which was paid in the current year.

Describe the different approaches and analysis on global taxation

On January 1, Year 1, Reese Incorporated issued bonds with a face value of $270,000, a stated rate of interest of 8 percent, and a five-year term to maturity. Interest is payable in cash on December 31 of each year. The effective rate of interest was 7 percent at the time the bonds were issued. The bonds sold for $281,070. Reese used the effective interest rate method to amortize bond premium.

Required

Prepare an amortization table. What item in the table would appear on the Year 3 balance sheet? What item in the table would appear on the Year 3 income statement? What item and amount in the table would appear on the Year 3 statement of cash flows (Direct Method) and under which section of the statement of cash flows would this item appear?

Complete this question by entering your answers in the tabs below.

• Req A
• Req B to D

b. What item in the table would appear on the Year 3 balance sheet?
c. What item in the table would appear on the Year 3 income statement?
d. What item and amount in the table would appear on the Year 3 statement of cash flows (Direct Method) and under which section of the statement of cash flows would this item appear?

DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating its suppliers and moving toward Lean Production. Many adjustment problems have been encountered, including problems relating to performance measurement. After much study, the company has decided to use the performance measures below, and it has gathered data relating to these measures for the first four months of operations.

requirement 3

3-a. (Month 5) Refer to the move time, process time, and so forth, given for month 4. Assume that in month 5 the move time, process time, and so forth, are the same as in month 4, except that through the use of Lean Production the company is able to completely eliminate the queue time during production. Compute the new throughput time and MCE.

3-b. (Month 6) Refer to the move time, process time, and so forth, given for month 4. Assume in month 6 that the move time, process time, and so forth, are again the same as in month 4, except that the company is able to completely eliminate both the queue time during production and the inspection time. Compute the new throughput time and MCE.

(Round your answers to 1 decimal place.)

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A copy machine acquired with a cost of $1,410 has an estimated useful life of 4 years. It is also expected to have a useful operating life of 13,350 copies. Assuming that it will have a salvage value of $75, determine the depreciation for the first year and second year by the (15 points) (a) straight-line method (b) double-declining-balance method (c) units-of-output method (4,500 copies were made the first year 3,200 copies second year

Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage

Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows:

It is expected that 5,600 units will be sold at a price of $160 a unit. Maximum sales within the relevant range are 7,000 units.

Required:

1. Prepare an estimated income statement for 20Y7.

2. What is the expected contribution margin ratio? Round to the nearest whole percent.
%

3. Determine the break-even sales in units and dollars.

4. Construct a cost-volume-profit chart on your own paper. What is the break-even sales?
$

5. What is the expected margin of safety in dollars and as a percentage of sales?

6. Determine the operating leverage. Round to one decimal place.

Break-Even Sales Under Present and Proposed Conditions

Darby Company, operating at full capacity, sold 154,100 units at a price of $105 per unit during the current year. Its income statement is as follows:

The division of costs between variable and fixed is as follows:

Management is considering a plant expansion program for the following year that will permit an increase of $1,260,000 in yearly sales. The expansion will increase fixed costs by $168,000, but will not affect the relationship between sales and variable costs.

Required:

1. Determine the total variable costs and the total fixed costs for the current year.

2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year.

3. Compute the break-even sales (units) for the current year.
units

4. Compute the break-even sales (units) under the proposed program for the following year.
units

5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $5,855,500 of income from operations that was earned in the current year.
units

6. Determine the maximum income from operations possible with the expanded plant.
$

7. If the proposal is accepted and sales remain at the current level, what will the income or loss from operations be for the following year?
$  

8. Based on the data given, would you recommend accepting the proposal?

1. In favor of the proposal because of the reduction in break-even point.
2. In favor of the proposal because of the possibility of increasing income from operations.
3. In favor of the proposal because of the increase in break-even point.
4. Reject the proposal because if future sales remain at the current level, the income from operations will increase.
5. Reject the proposal because the sales necessary to maintain the current income from operations would be below the current year sales.

Choose the correct answer.

Complete the table to determine the Baddebt Expenses for the period.

Villanueva, Inc. is a supplier of supplies. The following is the status of accounts receivable ("Aging")

Assuming a credit balance of $3,050.00 on the counter account. (Allowancefordoubtfulaccounts.) How much should we affect the account?
Determine the net realizable value after adjustment.
Prepare the entries for the period adjustment.

1. Horizontal Analysis of the Income Statement

   Income statement data for Winthrop Company for two recent years ended December 31, are as follows:

   	Current Year			Previous Year
   Sales	$800,000			$640,000
   Cost of goods sold	676,500			550,000
   Gross profit	$123,500			$90,000
   Selling expenses	$35,650			$31,000
   Administrative expenses	31,980			26,000
   Total operating expenses	$67,630			$57,000
   Income before income tax	$55,870			$33,000
   Income tax expenses	22,300			13,200
   Net income	$33,570			$19,800

   a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. If required, round to one decimal place.

   Winthrop Company
   Comparative Income Statement
   For the Years Ended December 31
   	Current year Amount	Previous year Amount	Increase (Decrease) Amount	Increase (Decrease) Percent
   Sales	$800,000	$640,000	$	%
   Cost of goods sold	676,500	550,000		%
   Gross profit	$123,500	$90,000	$	%
   Selling expenses	$35,650	$31,000	$	%
   Administrative expenses	31,980	26,000		%
   Total operating expenses	$67,630	$57,000	$	%
   Income before income tax	$55,870	$33,000	$	%
   Income tax expense	22,300	13,200		%
   Net income	$33,570	$19,800	$	%

   Feedback

   b. The net income for Winthrop Company increased between years. This increase was the combined result of an

   • increase
   • decrease
   in sales and
   • higher
   • lower
   percentage
   • increase
   • decrease
   in cost of goods sold. The cost of goods sold increased at a
   • slower
   • faster
   rate than the increase in sales, thus causing the percentage increase in gross profit to be
   • greater
   • less
   than the percentage increase in sales.

Bell Company, a manufacturer of audio systems, started its production in October 2020. For the preceding 3 years, Bell had been a retailer of audio systems. After a thorough survey of audio system markets, Bell decided to turn its retail store into an audio equipment factory.

Raw material costs for an audio system will total $75 per unit. Workers on the production lines are on average paid $14 per hour. An audio system usually takes 5 hours to complete. In addition, the rent on the equipment used to assemble audio systems amounts to $5,300 per month. Indirect materials cost $7 per system. A supervisor was hired to oversee production; her monthly salary is $3,700.

Factory janitorial costs are $1,600 monthly. Advertising costs for the audio system will be $9,100 per month. The factory building depreciation expense is $6,000 per year. Property taxes on the factory building will be $8,400 per year.

Assuming that Bell manufactures, on average, 1,000 audio systems per month, enter each cost item on your answer sheet, placing the dollar amount per month under the appropriate headings. Total the dollar amounts in each of the columns.

Compute the cost to produce one audio system

Problem 3: Another Sleuth Question

1. In 1/1/ 20x1 Co. X sold a machine. On that date the “Machinery” account had a balance of $400,000 and a balance of $500,000 at 2/31/x4. The Machinery Accumulated Depreciation Account had beginning and ending balances of $200,000 and $250,000, respectively. During the year Co. X purchased $120,000 of machinery and had $60,000 of Deprecation Expense

• How much of Machinery Cost was written off on the sale of Machinery?

• How much of Machinery Cost was written off on the sale of Machinery?

• If the company experienced a loss on the sale of machinery of , how much cash was collected when the machinery was sold?