Calculate Payroll

Breakin Away Company has three employees—a consultant, a computer programmer, and an administrator. The following payroll information is available for each employee:

For the current pay period, the computer programmer worked 50 hours and the administrator worked 48 hours. The federal income tax withheld for all three employees, who are single, can be determined from the wage bracket withholding table in Exhibit 2. Assume further that the social security tax rate was 6.0%, the Medicare tax rate was 1.5%, and one withholding allowance is $75.

Determine the gross pay and the net pay for each of the three employees for the current pay period. If required, round your answers to two decimal places.

Company ehf. which produces high quality headphones has been in the marketing campaign for the past six years. To meet ever-increasing competition in this market, the CEO of Company ehf. that an ad campaign is needed next year to maintain the company's market share. At his request, the operating accountant has compiled the accompanying figures from the cost accounting for 2012 in order to prepare the marketing plan for next year, ie. 2013.

It is requested:

a) What will be the estimated operating income this year, ie.

B) What is the contribution margin per unit of contribution this year?

C) What is the break-even point in units this year?

D) The CEO believes that in order to achieve sales targets next year, ISK 1 million needs to be set. more advertising than this year, but other costs will remain unchanged. What then does the sales revenue need to be in 2013 in order for the business to be in balance (to break-even)?

E) What does the sales revenue need to be in 2013, e.g. this ISK 1 million advertising campaign, to have the same operating profits as expected this year?

Tea Ltd is a public company whose common shares are traded in the stock market. Tea recently issued various financial instruments to the public, as described below.

(a) 7% convertible bonds with a face value of $1,000 and maturity date on December 31, 2027. Each bond can be converted into whatever number of Tea’s common shares such that the value of the common shares which the holder receives from conversion is equal to $1,500.   

2. 5% convertible, cumulative, redeemable preference shares. Each preference share can be converted into 5 of Tea’s common shares at the conversion price of $10 per common share. The conversion period is from January 1, 2022 to June 30, 2026. At the date of issue of the convertible preference shares, Tea’s common shares were traded at $50 per share.

If the preference shares are not converted by June 30, 2026, it will be mandatorily redeemed on July 1, 2026 at the redemption price of $300 per share.   

3. 2% perpetual bonds (bonds with no maturity date which pay a stream of interest forever as long as the issuer still exists). The bonds entitle the holders to a 2% interest to be paid annually in arrears on December 31. In addition, the holders can receive the repayment of principal when the issuer (Tea) liquidates in the future.   

Required: Discuss the classification of the financial instruments above.

Cecil C. Seymour is a 64-year-old widower. He had income for 2018 as follows:

Pension from former employer $39,850

Interest income from Alto National Bank 5,500

Interest income on City of Alto bonds  4,500

Dividends received from IBM stock held for over one year 2,000

Collections on annuity contract he purchased from Great Life Insurance  5,400

Social Security benefits 14,000

Rent income on townhouse 9,000

The cost of the annuity was $46,800, and Cecil was expected to receive a total of 260 monthly payments of $450. Cecil has received 22 payments through 2017. Cecil’s 40-year-old daughter, Sarah C. Seymour, borrowed $60,000 from Cecil on January 2, 2017. She used the money to start a new business. Cecil does not charge her interest because she could not afford to pay it, but he does expect to collect the principal eventually. Sarah is living with Cecil until the business becomes profitable. Except for housing, Sarah provides her own support from her business and $1,600 in dividends on stocks that she inherited from her mother. Other relevant information is presented below: • Expenses on rental townhouse:

Utilities $2,800

Maintenance 1,000

Depreciation 2,000

Real estate taxes 750

Insurance 700

• State income taxes paid: $3,500

• County personal property taxes paid: $2,100

• Payments on estimated 2016 Federal income tax: $5,900

• Charitable contributions of cash to Alto Baptist Church: $6,400

• Federal interest rate: 6%

• Sales taxes paid: $912

Compute Cecil’s 2018 Federal income tax payable (or refund due).

Endless Mountain Company manufactures a single product that is popular with outdoor recreation enthusiasts. The company sells its product to retailers throughout the northeastern quadrant of the United States. It is in the process of creating a master budget for 2017 and reports a balance sheet at December 31, 2016 as follows:

The company’s chief financial officer (CFO), in consultation with various managers across the organization has developed the following set of assumptions to help create the 2017 budget:

The budgeted unit sales are 12,000 units, 37,000 units, 15,000 units, and 25,000 units for quarters 1-4, respectively. Notice that the company experiences peak sales in the second and fourth quarters. The budgeted selling price for the year is $32 per unit. The budgeted unit sales for the first quarter of 2018 is 13,000 units.

All sales are on credit. Uncollectible accounts are negligible and can be ignored. Seventy-five percent of all credit sales are collected in the quarter of the sale and 25% are collected in the subsequent quarter.

Each quarter’s ending finished goods inventory should equal 15% of the next quarter’s unit sales.

Each unit of finished goods requires 3.5 yards of raw material that costs $3.00 per yard. Each quarter’s ending raw materials inventory should equal 10% of the next quarter’s production needs. The estimated ending raw materials inventory on December 31, 2017 is 5,000 yards.

Seventy percent of each quarter’s purchases are paid for in the quarter of purchase. The remaining 30% of each quarter’s purchases are paid in the following quarter.

Direct laborers are paid $18 an hour and each unit of finished goods requires 0.25 direct labor-hours to complete. All direct labor costs are paid in the quarter incurred.

The budgeted variable manufacturing overhead per direct labor-hour is $3.00. The quarterly fixed manufacturing overhead is $150,000 including $20,000 of depreciation on equipment. The number of direct labor-hours is used as the allocation base for the budgeted plantwide overhead rate. All overhead costs (excluding depreciation) are paid in the quarter incurred.

The budgeted variable selling and administrative expense is $1.25 per unit sold. The fixed selling and administrative expenses per quarter include advertising ($25,000), executive salaries ($64,000), insurance ($12,000), property tax ($8,000), and depreciation expense ($8,000). All selling and administrative expenses (excluding depreciation) are paid in the quarter incurred.

The company plans to maintain a minimum cash balance at the end of each quarter of $30,000. Assume that any borrowings take place on the first day of the quarter. To the extent possible, the company will repay principal and interest on any borrowings on the last day of the fourth quarter. The company’s lender imposes a simple interest rate of 3% per quarter on any borrowings.

Dividends of $15,000 will be declared and paid in each quarter.

The company uses a last-in, first-out (LIFO) inventory flow assumption. This means that the most recently purchased raw materials are the “first-out” to production and the most recently completed finished goods are the “first-out” to customers.

Create:

1.Ending Finished Goods inventory budget (absorption costing basis) For year end December 2017

2. Quarterly Cash budget for Year ended dec 31, 2017

3. Budgeted Balance Sheet at Dec 31, 2017

Question 1

Fantastic Fashions has just completed its first quarter of operations. Below are transactions that have not yet been recorded. Prepare the journal entries listed below.

       Jan 1     Pre-tax cash sales amounted to $75,000. HST is collected on all sales at a rate of 13%.

       Jan 15 Signed a three month note for $12,000 to extend amounts owing on account to Trendy Taste Inc. Interest is 6% annually and due at maturity.

       Mar 1     Received the annual property tax bill for $7,500 payable on June 1.

       Apr 1      Paid salaries of $10,000; of this amount $495 is CPP, $178 is EI and $3,465 is for income taxes (record the employer portion as well).

       Apr 15    Paid the note due.

       Apr 29    A customer sued Fantastic Fashions for $200,000. Legal counsel has advised that it is unlikely damages will be awarded.

       Jun 1     Paid the property taxes bill in full.

Question 2

On January 1, Wonder Water borrowed $300,000 for 5 years at 4.5% to finance expansion. Fixed Principal Payments are to be made quarterly beginning Mar 1. Below is an instalment schedule for Wonder Water.

WONDER WATER

INSTALMENT PAYMENT SCHEDULE- FIXED PRINCIPAL PAYMENTS

Instructions

(a) Determine the missing values (round to the nearest dollar).

(b) Prepare the journal entries for the payments made on March 1 and Sept 1.

Posa Hotels, Inc., has a sixth night free policy. Every sixth night a guest stays at the hotel is free. Because not all guests stay enough nights to earn a free stay, on average the number of free nights redeemed is 70% of the maximum possible number of free nights available one obtains by dividing the total number of paid nights the hotel has had by 5. Rooms at Posa Hotels cost $300 per night. In 2019, Posa had a total of 100,000 paid room-nights and collected a total of $30 million from customers. Also in 2019, customers redeemed a total of 10,000 free room-nights. Some of the room-nights awarded were based on customers paid nights from previous years and some were based on paid nights from the current year. Required: Prepare journal entries to record revenue for 2019 for Posa. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) 1)Prepare the entry to record the revenue recognized for the nights paid by customers. 2)Prepare the entry to record the revenue recognized for the free nights redeemed by customers.

1} Searching the internet for two current jobs available in the accounting field. Two current jobs avaible in marketing field. Two current jobs in hospitality or fashion field.Two curent jobs in in the management field. Two current jobs in human resource. Two current job in finance field.( Search the job sites Indeed.com, Careerbuilder.com, and one other job search that you have found)

Write a summary of the job requirements for each and including educational and experience requirements. Include a paragraph on wich job search site you liked best for each and explain why.Links reseach should be cited for each summary.

Describe how the following items are computed: a. Gross margin, and b.Contribution margin. Please be detailed.

Carlos Sanchez opened a business called Sanchez Engineering and recorded the following transactions in its first month of operations.

  
For transactions a-g, review the unadjusted balance and prepare the adjusting entry necessary to correctly report the revenue earned or the expense incurred.  Descriptions of items that require adjusting entries on June 30, 2017, follow.

a) The company has completed, but not yet billed, $12,800 of engineering services for a client.

b) Straight-line depreciation on the office equipment, assuming a 5-year life and a $2,900 salvage value, is $210 per month.

c) Straight-line depreciation on the drafting equipment, assuming a 5-year life and a $11,200 salvage value, is $1,600 per month.

d) Straight-line depreciation on the building, assuming a 25-year life and a $7,500 salvage value, is $130 per month.

e) The balance in prepaid insurance represents a 15-month policy that went into effect on June 1.

f) Accrued interest on the long-term note payable is $140.

g) The drafting assistant is paid $1,600 for a 5-day work week. 2 days' wages have been incurred but are unpaid as of month-end.

Enumerate and briefly explain the differences between the IFRS and US GAAP on the following issues:

Treatment of Contingent Assets and Liabilities

Treatment of Asset Recognition

Treatment of Revenue Recognition

Treatment of Options

Treatment of Onerous Contracts

Treatment of Restructuring Provision

Treatment of Measurement of Deferred Taxes

Treatment of Service Contracts

Treatment of Financial Assets

International Accounting (Loose-Leaf) 5e (Doupnik/Perera) McGraw-Hill (2019) 9781260466539.

Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc., has been experiencing financial difficulty for some time. The company’s contribution format income statement for the most recent month is given below:

Sales (13,400 units × $20 per unit) $ 268,000

Variable expenses 134,000

Contribution margin 134,000

Fixed expenses 149,000

Net operating loss $ (15,000 )

Required: 1. Compute the company’s CM ratio and its break-even point in unit sales and dollar sales.

2. The president believes that a $6,400 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an $87,000 increase in monthly sales. If the president is right, what will be the increase (decrease) in the company’s monthly net operating income?

3. Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $32,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net operating income (loss)?

4. Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop computer battery would grow sales. The new package would increase packaging costs by 0.50 cents per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $5,000?

5. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $58,000 each month. a. Compute the new CM ratio and the new break-even point in unit sales and dollar sales. b. Assume that the company expects to sell 21,000 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are. (Show data on a per unit and percentage basis, as well as in total, for each alternative.) c. Would you recommend that the company automate its operations (Assuming that the company expects to sell 21,000)?

Thank you in advance.

CA 24-12, p. 1457

CA24-12 ETHICS (Reporting of Subsequent Events) In June 2017, the board of directors for McElroy Enterprises Inc. authorized the sale of $10,000,000 of corporate bonds. Jennifer Grayson, treasurer for McElroy Enterprises Inc., is concerned about the date when the bonds are issued. The company really needs the cash, but she is worried that if the bonds are issued before the company's year-end (December 31, 2017) the additional liability will have an adverse effect on a number of important ratios. In July, she explains to company president William McElroy that if they delay issuing the bonds until after December 31 the bonds will not affect the ratios until December 31, 2018. They will have to report the issuance as a subsequent event which requires only footnote disclosure. Grayson expects that with expected improved financial performance in 2018, ratios should be better.
Instructions

(a) What are the ethical issues involved?

(b) Should McElroy agree to the delay?