4. Briefly discuss the amending of receipts entered into manual accounts receivable system

5. Why is it important to verify bad and doubtful debt status through liaison with debtors?

6. Explain the importance of completing the reporting procedures and required documentation for bad and doubtful debts

Arrange the following items in proper balance sheet presentation: (Amounts to be deducted should be indicated with parentheses or a minus sign.)
  

Break even analysis accompany fixed operating cost are 430000 its variable costs are 2.95 per unit and the product sales prices is 4.50 what is the company break even point that is at what unit sales volume will its income equal its cost

With zero-based budgeting, each expenditure item must be justified for the new budget period.” Explain.

Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $32 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally:

*One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value).

Required:

1. Assuming the company has no alternative use for the facilities that are now being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 17,000 carburetors from the outside supplier?

2. Should the outside supplier’s offer be accepted?

3. Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed capacity to launch a new product. The segment margin of the new product would be $170,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 17,000 carburetors from the outside supplier?

4. Given the new assumption in requirement 3, should the outside supplier’s offer be accepted?

1. Prior to liquidating their partnership, Craig and Jenny had capital accounts of $74,060 and $125,920, respectively. The partnership assets were sold for $242,930. The partnership had $27,060 of liabilities. Craig and Jenny share income and losses equally.

Determine the amount received by Jenny as a final distribution from liquidation of the partnership.

2. Emerson and Dakota formed a partnership dividing income as follows:

1. Annual salary allowance to Emerson of $39,600
2. Interest of 10% on each partner's capital balance on January 1
3. Any remaining net income divided equally.

Emerson and Dakota had $20,000 and $126,400, respectively, in their January 1 capital balances. Net income for the year was $222,400.

How much net income should be distributed to Dakota?

3. Malcolm has a capital balance of $63,200 after adjusting to fair market value. Celeste contributes $39,200 to receive a 25% interest in a new partnership with Malcolm.

Determine the amount and recipient of the partner bonus

4.A company had stock outstanding as follows during each of its first three years of operations: 4,000 shares of 9%, $100 par, cumulative preferred stock and 45,000 shares of $10 par common stock. The amounts distributed as dividends are presented below. Determine the total and per-share dividends for each class of stock for each year by completing the schedule. Round dividends per share to the nearest cent. Enter "0" if no dividends are paid.

What happens if an asset is partway through the useful life and an expenditure is made that significantly extends the estimated useful life?

Classifying Costs Assume you are going to become an entrepreneur and start your own business. Think about your talents and interests and come up with an idea for a small business venture that provides a unique product or service to local customers.

Pool Building Company

a) What would the major costs of your business be? Try to classify the costs into the areas of direct materials; direct labor; manufacturing overhead; and selling, general, and administrative expenses. (Hint: Not all businesses will have all of these cost classifications.)

b) Why would you need to determine the cost of providing your product or service to individual customers? In other words, what types of decisions would you expect to make based on job order cost information?

c) In general, would you expect your company’s indirect (overhead) costs to be less or more than the direct costs (direct labor and materials)? What allocation base do you think you would use to charge overhead costs to individual customers? How much do you think the overhead rate would need to be?

The Personnel Department at Hernandez Bros. is centralized and provides services to the two operating units: Miami and New York. The Miami unit is the original unit of the company and is well established. The New York unit is new, much like a start-up company. The costs of the Personnel Department are allocated to each unit based on the number of employees in order to determine unit profitability. The current rate is $560 per employee. Data for the fiscal year just ended show the following.

Miami New York

Number of employees 1,260 360

Number of new hires 16 26

Number of employees departing 14 24

Orlando, the manager of the New York unit, is unhappy with the results of the controller’s study. He asks the controller to develop separate rates for fixed and variable costs in the Personnel Department. The controller reports back to Orlando that the rates would be as follows:

Allocation based on Variable Rate Fixed Rate Total Rate

Employees $ 80 per employee $ 180 per employee $ 260 per employee

Transitions $ 2,060 per transition $ 4,015 per transition $ 6,075 per transition

Required: a. Orlando argues that New York should only be allocated the variable costs from this system, because the company would have to pay the fixed costs even if New York did not exist. Compute the cost allocated to each unit using the approach Orlando prefers.

2.

Upriver Parts manufactures two products, V-1 and V-2, at its River Plant. Selected data for an average month for the two products follow.

Production at the plant is automated and any labor cost is included in overhead. Data on manufacturing overhead at the plant follow.

Required:

a. Compute the unit costs for the two products V-1 and V-2 using the current costing system at Upriver (using machine hours as the allocation basis). (Do not round intermediate calculations. Round your answers to 2 decimal places.)
b. Compute the unit costs for the two products V-1 and V-2 using the proposed ABC system at Upriver.

On February 1, 2018, Cromley Motor Products issued 7% bonds, dated February 1, with a face amount of $60 million. The bonds mature on January 31, 2022 (4 years). The market yield for bonds of similar risk and maturity was 8%. Interest is paid semiannually on July 31 and January 31. Barnwell Industries acquired $60,000 of the bonds as a long-term investment. The fiscal years of both firms end December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

Choose a cost in your organization (or personal life). Now identify what drives that cost. Keep in mind that the cost driver is something that can be counted!

For instance, if I choose gasoline cost, my cost driver is the number of miles I drive to meet at clients' offices. At home, the cost driver for my electric bill is the number of people-days at my house - i.e. some months everyone is gone (low bill), and other times many houseguests makes for a high electric bill. What are your examples?

Impairment Loss

On July 1, 2015, Karen Company purchased equipment for $325,000; the estimated useful life was 10 years and the expected salvage value was $40,000. Straight-line depreciation is used. On July 1, 2019, economic factors cause the market value of the equipment to decrease to $90,000. On this date, Karen evaluates if the equipment is impaired and estimates future cash flows relating to the use and disposal of the equipment to be $195,000.

a. Is the equipment impaired at July 1, 2019?

b. If the equipment is impaired at July 1, 2019, calculate the amount of the impairment loss.
Impairment loss = $

c. If the equipment is impaired at July 1, 2019, prepare the journal entry to record the impairment loss.

Required information

Use the following information for the Exercises below.

[The following information applies to the questions displayed below.]

Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center).

Exercise 9-10 Computing return on investment and residual income; investing decision LO A1

1. Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company?
2. Assume a target income level of 12% of average invested assets. Compute residual income for each department. Which department generated the most residual income for the company?
3. Assume the Electronics department is presented with a new investment opportunity that will yield a 15% return on investment. Should the new investment opportunity be accepted?

Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company?

Assume a target income level of 12% of average invested assets. Compute residual income for each department. Which department generated the most residual income for the company?

Assume the Electronics department is presented with a new investment opportunity that will yield a 15% return on investment. Should the new investment opportunity be accepted?

Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $40 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally:

*One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value).

Required:

1. Assuming the company has no alternative use for the facilities that are now being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 18,000 carburetors from the outside supplier?

2. Should the outside supplier’s offer be accepted?

3. Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed capacity to launch a new product. The segment margin of the new product would be $180,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 18,000 carburetors from the outside supplier?

4. Given the new assumption in requirement 3, should the outside supplier’s offer be accepted?