Problem 10-4A Sell or process LO A1

Harold Manufacturing produces denim clothing. This year, it produced 5,120 denim jackets at a manufacturing cost of $42.00 each. These jackets were damaged in the warehouse during storage. Management investigated the matter and identified three alternatives for these jackets.

1. Jackets can be sold to a secondhand clothing shop for $8.00 each.
2. Jackets can be disassembled at a cost of $31,300 and sold to a recycler for $11.00 each.
3. Jackets can be reworked and turned into good jackets. However, with the damage, management estimates it will be able to assemble the good parts of the 5,120 jackets into only 2,980 jackets. The remaining pieces of fabric will be discarded. The cost of reworking the jackets will be $101,800, but the jackets can then be sold for their regular price of $45.00 each.

Required:
1. Calculate the incremental income.

Required information Use the following information to answer questions [The following information applies to the questions displayed below.] The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system. April 30 May 31 Inventories Raw materials $ 45,000 $ 41,000 Work in process 9,200 19,700 Finished goods 61,000 33,900 Activities and information for May Raw materials purchases (paid with cash) 170,000 Factory payroll (paid with cash) 200,000 Factory overhead Indirect materials 17,000 Indirect labor 46,000 Other overhead costs 103,000 Sales (received in cash) 1,400,000 Predetermined overhead rate based on direct labor cost 55 % Exercise 15-7 Cost flows in a job order costing system LO P1, P2, P3, P4 Compute the following amounts for the month of May using T-accounts. Cost of direct materials used. Cost of direct labor used. Cost of goods manufactured. Cost of goods sold.* Gross profit. Overapplied or underapplied overhead. *Do not consider any underapplied or overapplied overhead.

1. Question 1:
   
   • Proficient-level:
     • Identify and describe the three basic forms of business organizations.
     • What are the advantages and disadvantages of each form of ownership?
2. Question 2:
   
   • Proficient-level:
     • Identify the primary objectives of every business.
     • What are the four basic financial statements that measure the primary objectives of every business?
     • Describe what information each statement presents and which of the primary objective(s) can be met through the information presented on the statement.
3. Question 3:
   
   • Proficient-level:
     • Identify the framework for the entire accounting process and describe its components and how they fit together to form this framework.
4. Question 4:
   
   • Proficient-level:
     • To allow the accounting process to run smoothly, accountants must rely on a set of underlying concepts or assumptions. Identify and describe each of the five concepts or assumptions.
5. Question 5:
   
   • Proficient-level:
     • Many accounting transactions will apply to one or more of the financial statements. In the case of the balance sheet, multiple account types can be affected. For each of the following items, provide an example of a transaction that would have the following effects on the items in a firm's financial statements. Provide five correct responses:
       • Increase an asset; decrease some other asset.
       • Increase an asset; increase a liability.
       • Decrease retained earnings; decrease an asset.
       • Increase an asset; increase retained earnings.
       • Decrease an asset; decrease a liability.
       • Increase a liability; decrease retained earnings.
6. Question 6:
   
   • Proficient-level:
     • Consider this scenario. James Stevens was taking an accounting course at State University. Also, he was helping companies find accounting systems that would fit their information needs. He advised one of his clients to acquire a software computer package that could record business transactions and prepare financial statements. The licensing agreement with the software company specified that the basic charge for one site was USD 4,000 and that USD 1,000 must be paid for each additional site where the software was used. James was pleased that his recommendation to acquire the software was followed. However, he was upset that management wanted him to install the software at eight other sites in the company and did not intend to pay the extra USD 8,000 due the software company. A member of management stated, "The software company will never know the difference and, besides, everyone else seems to be pirating software. If they do find out, we will pay the extra fee at that time. Our expenses are high enough without paying these unnecessary costs." James believed he might lose this client if he did not do as management instructed. Discuss whether you believe this is an ethical violation.

Suppose Torche Corporation has the following results related to cash flows for 2018:

Net Income of $8,500,000

Decrease in Accounts Payable of $400,000

Increase in Accounts Receivable of $800,000

Increase in Debt of $100,000

Depreciation Expenses of $1,600,000

Purchases of Property, Plant, & Equipment of $5,400,000

Assuming no other cash flow adjustments than those listed above, create a statement of cash flows with amounts in thousands.

What is the Net Cash Flow?

Please specify your answer in the same units as the statement of cash flows.

Problem 5-50 Activity-Based Costing; Analysis of Operations (LO 5-1, 5-2, 5-4, 5-5, 5-7, 5-10)

Grady and Associates performs a variety of activities related to information systems and e-commerce consulting in Toronto, Canada. The firm, which bills $160 per hour for services performed, is in a very tight local labor market and is having difficulty finding quality help for its overworked professional staff. The cost per hour for professional staff time is $70. Selected information follows.

• Billable hours to clients for the year totaled 8,000, consisting of information systems services, 4,800; e-commerce consulting, 3,200.
• Administrative cost of $411,760 was (and continues to be) allocated to both services based on billable hours. These costs consist of staff support, $220,200; in-house computing, $155,000; and miscellaneous office charges, $36,560.

A recent analysis of staff support costs found a correlation with the number of clients served. In-house computing and miscellaneous office charges varied directly with the number of computer hours logged and number of client transactions, respectively. A tabulation revealed the following data:

Required:
2. Assume that the firm uses traditional costing procedures, allocating total costs on the basis of billable hours. Determine the profitability of the firm’s information systems and e-commerce activities, expressing your answer both in dollars and as a percentage of activity revenue.
3. Assume that the firm uses activity-based costing. Determine the profitability of the firm’s information systems and e-commerce activities, expressing your answer both in dollars and as a percentage of activity revenue.
4. Jeffrey Grady, one of the firm’s partners, doesn’t care where his professionals spend their time because, as he notes, “many clients have come to expect both services and we need both to stay in business. Also, information systems and e-commerce professionals are paid the same hourly rate.” Should Grady’s attitude change?

I need # 3.

In February 2017, Sheridan Construction signed a contract and commenced construction on a parking garage. The total contract price was $90.9 million, and was expected to be completed in July 2021 at a total estimated cost of $82.9 million. Payment by the customer was to be made in several stages, based on significant events and dates throughout the construction timeline. The customer was to have control over the parking garage and was able to make major changes to the project during the construction process. Sheridan’s year-end was September 30.

By the end of September, 2017, Sheridan had incurred $12,435,000 in costs and had invoiced $10,100,000 in progress billings. $9,100,000 of the progress billings had been collected.

By September 30, 2018, Sheridan had incurred $51,415,000 in total costs and had invoiced $45,200,000 in progress billings, including the progress billings in 2017. Of the total billings, $30,400,000 in total had been collected. Also, Sheridan reviewed its cost estimates on the project, and now believed the parking garage would cost $79.1 million in total to complete.

Prepare all journal entries required for the year ended September 30, 2017. Use Accounts Payable for costs incurred to date. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Prepare all journal entries required for the year ended September 30, 2018. Use Accounts Payable for costs incurred to date. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

What is the role of professional judgement in accounting and two implications on the users of accounting information if the professional judgment has not been made in the most appropriate approach.

Kubin Company’s relevant range of production is 26,000 to 35,500 units. When it produces and sells 30,750 units, its average costs per unit are as follows:

Required:

1. For financial accounting purposes, what is the total amount of product costs incurred to make 30,750 units?

2. For financial accounting purposes, what is the total amount of period costs incurred to sell 30,750 units?

3. For financial accounting purposes, what is the total amount of product costs incurred to make 35,500 units?

4. For financial accounting purposes, what is the total amount of period costs incurred to sell 26,000 units?

(For all requirements, do not round intermediate calculations.)

The Kimm Company had the following assets and liabilities on the dates indicated.
Kimm began business on January 1, 2013, with an investment of $600,000 (60,000 shares, par value = $10).

1. In 2013, Kimm paid $50,000 dividends and no additional investment was made. Other comprehensive income was $1,000
2. In 2014, Kimm paid $100,000 dividends, additional investment of $200,000 (20,000 shares, par value = $10) was made by shareholders on September 1, 2014. Other comprehensive income (loss) was $(2,000).
3. In 2015, Kimm had zero dividends and no additional investment was made. Other comprehensive income (loss) was $(500,000).

P1. Determine net income in 2013, 2014 and 2015. (Show work clearly)

P2. Determine basic earnings per share in 2013, 2014 and 2015. (Show work clearly)

P3. Determine comprehensive income in 2013, 2014 and 2015. (Show work clearly)

P4. Determine the balance of retained earnings at the end of 2015. (Show work clearly)

P5. Determine the balance of common stock at the end of 2015. (Show work clearly)

P6. Determine the balance of accumulated other comprehensive income at the end of 2015. (Show work clearly)

Hint : Use Equity = CS +RE+AOCI, along with A = L + E. No preferred stock (thus no preferred div, net income to common stockholders = net income)

In conducting interviews and observing factory operations to implement an activity-based costing system, you determine that several activities are unnecessary or redundant. For example, warehouse personnel was inspecting purchased components as they were received at the loading dock. Later that day, the components were inspected again on the shop floor before being installed in the final product. Both of these activities caused costs to be incurred but were not adding value to the product. If you include this observation in your report, one or more employees who perform inspections will likely lose their jobs. Page 804 Required As a plant employee, what is your responsibility to report your findings to superiors? Should you attempt to determine if the redundancy is justified? Explain. What is your responsibility to the employees whose jobs will likely be lost because of your report? What facts should you consider before making your decision to report or not??

Please do not answer in jpg format. kindly use word or txt.

Based on the given information, calculate PV of the bonds and prepare amortization schedules (1 discounted bond and 1 premium bond).

Term=40, coupon rate 4%, principal 100000 , interest payment per period 4000, lifetime interest payment 160000 and market interest rate (effective rate) 3.5%

pv of lifetime interest payment

pv of principal paypment

pv of bond

Review Exercise 3-1 on page 115 of the text. Compute the company's predetermined overhead rate and explain the four-step process to compute a predetermined overhead rate. How would this rate be effected if the direct labor hours increased to 25,000? How would the rate be effected if the overhead were to increase to $150,000. Give examples of some of the challenges a manager may have in completing this computation.

Harris Fabrics computes its predetermined overhead rate annually on the basis of direct labor hours. At the beginning of the year, it estimated that 20,000 direct labor-hours would be required for the period’s estimated level of production. The company also estimated $94,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $2.00 per direct labor hour. Harris’s actual manufacturing overhead for the year was $123,900 and its actual total direct labor was 21,000 hours.

Required:

Compute the company’s predetermined overhead rate for the year.

Kaya Company prepared the following random list of assets, liabilities, revenues, and expenses from its December 31, 2019 accounting records. The beginning balance of Capital as of January 1, 2019, was $43,100 and the owner, Kaya Strong withdrew 14,600 during the year. Prepare the balance sheet for Kaya Company as of December 31, 2019.

Accounts receivable      $15,700         Service revenue       $50,500

Interest expense                4,900         Cash                          97,500

Supplies                            1,500         Note payable             17,000

Accounts payable         106,100         Salary expense          18,000

Utilities expense               5,200         Interest payable          1,600

Furniture                         18,000         Rent expense               9,400

Salary payable                  2,400         Automobiles             12,900

                                                            Land                           23,000

Kaya Company prepared the following random list of assets, liabilities, revenues, and expenses from its December 31, 2019 accounting records. The beginning balance of Capital as of January 1, 2019, was $43,100 and the owner, Kaya Strong withdrew 14,600 during the year. Prepare the balance sheet for Kaya Company as of December 31, 2019.

Accounts receivable      $15,700         Service revenue       $50,500

Interest expense                4,900         Cash                          97,500

Supplies                            1,500         Note payable             17,000

Accounts payable         106,100         Salary expense          18,000

Utilities expense               5,200         Interest payable          1,600

Furniture                         18,000         Rent expense               9,400

Salary payable                  2,400         Automobiles             12,900

                                                            Land                           23,000

For each of the unrelated transactions described below, present the entries required to record each transaction.