in 2018 the westgate construction company entered into a contract to construct a road for Santa Clara County for 10,000,000 The road was completed in 2020. Calculate the amount of revenue and gross profit to be recognized in each of the 3 years assuming the following costs to incur and costs to complete information. ( Do not round intermediate calculations and round your final answers to the nearest whole dollar amount.

   2018    2019 2020

Cost incurred during the year $2,016,000 3,890,000    3,290,000

Estimated cost to complete as of year end $5,184,000    3,190,000   

Company A manufactures a high quality plastic pipe I two departments, cooking and molding. Materials are introduced at various points during the work in the cooking department. After the cooking is completed, the materials are transferred into the molding department, in which pipe is formed. Materials are accounted for in the cooking department on a pound basis. Conversion cost are incurred evenly during the cooking process.

                Production data:

                                Pounds in process, May 1: 100% complete as to materials,

                                90% complete as to conversion costs……………………………………..70,000

                                Pounds started into production during May……………………………..350,000

                                Pounds completed and transferred to molding……………………………….?

                                Pounds in process, May 31: 75% complete as to materials, 25% complete as to

                                Conversion costs……………………………………………………………………….40,000

                Cost data:

                                Work in process inventory, May 1:

                                Materials cost………………………………………………………………………86,000

                                Conversion cost………………………………………………………………………..36,000

                                Cost added during May:

                                Materials cost……………………………………………………………………………447,000

                                Conversion cost……………………………………………………………………….198,000

The company uses the weighted-average method to account for units and costs.

                                Following the steps in doing the process costing for the “Cooking dept”

                                First fill in the T-Account for May: WORK IN PROCESS-COOKING

Steps:

1. Determine the “units to account for”
2. Find the “units to account for”
3. Summarize the cost to account for
4. Get the equivalent units and the unit costs
5. Assign the costs and get the cost accounted for
6. Prepare the journal entry at the end of May for completed unites

Break-Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $190 per unit during the current year. Its income statement is as follows: Sales $190,000,000 Cost of goods sold (101,000,000) Gross profit $89,000,000 Expenses: Selling expenses $14,000,000 Administrative expenses 17,600,000 Total expenses (31,600,000) Operating income $57,400,000 The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 70% 30% Selling expenses 75% 25% Administrative expenses 50% 50% Management is considering a plant expansion program for the following year that will permit an increase of $9,500,000 in yearly sales. The expansion will increase fixed costs by $5,000,000 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. Total variable costs $ Total fixed costs $

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

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 $57,400,000 of operating income that was earned in the current year. units ?

6. Determine the maximum operating income possible with the expanded plant. $ ?

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

Hana Coffee Company roasts and packs coffee beans. The process begins by placing coffee beans into the Roasting Department. From the Roasting Department, coffee beans are then transferred to the Packing Department. The following is a partial work in process account of the Roasting Department at July 31: ACCOUNT Work in Process—Roasting Department ACCOUNT NO. Date Item Debit Credit Balance Debit Credit July 1 Bal., 30,000 units, 10% completed 121,800 31 Direct materials, 155,000 units 620,000 741,800 31 Direct labor 90,000 831,800 31 Factory overhead 33,272 865,072 31 Goods transferred, 149,000 units ? 31 Bal., ? units, 45% completed ? Required: 1. Prepare a cost of production report, and identify the missing amounts for Work in Process—Roasting Department. If an amount is zero, enter "0". When computing cost per equivalent units, round to the nearest cent. Hana Coffee Company Cost of Production Report-Roasting Department For the Month Ended July 31 Unit Information Units charged to production: Inventory in process, July 1 Received from materials storeroom Total units accounted for by the Roasting Department Units to be assigned costs: Equivalent Units Whole Units Direct Materials Conversion Inventory in process, July 1 Started and completed in July Transferred to Packing Department in July Inventory in process, July 31 Total units to be assigned costs Cost Information Cost per equivalent unit: Direct Materials Conversion Total costs for July in Roasting Department $ $ Total equivalent units Cost per equivalent unit $ $ Costs assigned to production: Direct Materials Conversion Total Inventory in process, July 1 $ Costs incurred in July Total costs accounted for by the Roasting Department $ Costs allocated to completed and partially completed units: Inventory in process, July 1 balance $ To complete inventory in process, July 1 $ $ Cost of completed July 1 work in process $ Started and completed in July Transferred to Packing Department in July $ Inventory in process, July 31 Total costs assigned by the Roasting Department $ Feedback 1. Calculate equivalent units for materials and conversion costs. Calculate the cost per equivalent unit for materials and conversion costs. Calculate the costs assigned to the beginning inventory, the units started and completed, and the ending inventory. 2. Assuming that the July 1 work in process inventory includes $119,400 of direct materials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between June and July. If required, round your answers to two decimal places. Increase or Decrease Amount Change in direct materials cost per equivalent unit $ Change in conversion cost per equivalent unit $

Loans - You need a new car and have decided to buy a Toyota Tundra. Fortunately, you have a great credit rating and you have your choice of financing. The cost is $26,000 out of the door. You have $3,000 to put down for a down payment. You have two finance options and need to decide which one is the best.

Option 1 - You can choose 0% financing for 60 months. The loan amount is $23,000.

a. What is your monthly payment? (Hint: divide the loan amount by 60)

b. What is the total amount you will pay for the car? (Hint: Don't think too hard... it is just the amount of the loan.)

Option 2 - You can choose $2,000 cash back, instead of 0% financing from the dealer, and decide to receive financing from your local bank. You will need to borrow $21,000 at an interest rate of 2.75% for 60 months.

c. Create an amortization table and past the first 5-6 lines in your word document.

d. What is your monthly payment?

e. What is the total amount you will pay for the car? (Add the payment column.) (.5 points)

f. Which option is better? (.5 points)

You take out a loan in the amount of $14,000 to buy a Kia Soul. The bank offers you a 3 year loan with an APR of 2.9%.

    a. Create an amortization table. Paste the first five or six lines in your Word document.

    b. What is the total amount you end up paying (including principal and interest)? (Hint: You can just add the payment column.)

Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): 2018 2017 Sales $ 4,600,000 $ 3,700,000 Cost of goods sold 2,900,000 2,040,000 Administrative expenses 840,000 715,000 Selling expenses 400,000 352,000 Interest revenue 154,000 144,000 Interest expense 208,000 208,000 Loss on sale of assets of discontinued component 66,000 — On July 1, 2018, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by GAAP. The assets of the component were sold on September 30, 2018, for $66,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows: 1/1/18-9/30/18 2017 Sales $ 440,000 $ 540,000 Cost of goods sold (310,000 ) (344,000 ) Administrative expenses (54,000 ) (44,000 ) Selling expenses (24,000 ) (34,000 ) Operating income before taxes $ 52,000 $ 118,000 In addition to the account balances above, several events occurred during 2018 that have not yet been reflected in the above accounts: A fire caused $54,000 in uninsured damages to the main office building. The fire was considered to be an infrequent but not unusual event. Inventory that had cost $44,000 had become obsolete because a competitor introduced a better product. The inventory was sold as scrap for $7,000. Income taxes have not yet been recorded. Required: Prepare a multiple-step income statement for the Reed Company for 2018, showing 2017 information in comparative format, including income taxes computed at 40% and EPS disclosures assuming 500,000 shares of common stock

The city of Brock’s Water Enterprise Fund leases water treatment equipment. The life of the noncancel-lable lease is 10 years, and the expected life of the equipment is 12 years. Using an 8 percent interest rate, the present value of the lease payments is $905,861. The first payment of $125,000 is due when the lease begins, January 5, 2018. An additional payment is due on January 5th for each of the next 9 years. Prepare journal entries to record:

1. The lease of the equipment on January 5, 2018.

2. The first lease payment on January 5, 2018.

3. Amortization expense for fiscal year ending December 31, 2018

4. The second lease payment on January 5, 2019

Required: Identify each of the costs accordingly by placing an “X” in the appropriate boxes. Each cost can be classified multiple times. Please tell why for each. Thank you

1. You have been asked by a long-term friend to fill a vacancy on the five-person board of trustees for a small private company. The company’s principal asset is a banana plantation located on a remote South Pacific island. Your friend is the sole manager of the company which was organized as a trust for the benefit of her and her two brothers, who are also members of the trust’s board. The only other trustee director is the company’s long-time chief accountant.

Before making your decision, you made inquiries about the company’s financial reporting practices. You learned the following:

• The company’s annual financial statements were not audited by an independent certified public accountant. The trustees believed the benefits of audited financial statements were not worth the cost.

• The company’s fiscal period ran from January 1 to December 31.

• A full set of semiannual financial statements was prepared each year for the six-month period ending June 30. Like the annual financial report, they were available approximately two to three months after the close of the accounting period.

How might the information you learned about the financial reporting practices influence your decision to join the board of trustees?

Problem 08-3A Flexible budget preparation; computation of materials, labor, and overhead variances; and overhead variance report LO P1, P2, P3, P4 Skip to question [The following information applies to the questions displayed below.] Antuan Company set the following standard costs for one unit of its product. Direct materials (4.0 Ibs. @ $6.00 per Ib.) $ 24.00 Direct labor (1.9 hrs. @ $13.00 per hr.) 24.70 Overhead (1.9 hrs. @ $18.50 per hr.) 35.15 Total standard cost $ 83.85 The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume of 75% of the factory’s capacity of 20,000 units per month. Following are the company’s budgeted overhead costs per month at the 75% capacity level. Overhead Budget (75% Capacity) Variable overhead costs Indirect materials $ 15,000 Indirect labor 90,000 Power 15,000 Repairs and maintenance 30,000 Total variable overhead costs $ 150,000 Fixed overhead costs Depreciation—Building 24,000 Depreciation—Machinery 72,000 Taxes and insurance 18,000 Supervision 263,250 Total fixed overhead costs 377,250 Total overhead costs $ 527,250 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (61,000 Ibs. @ $6.20 per lb.) $ 378,200 Direct labor (22,000 hrs. @ $13.10 per hr.) 288,200 Overhead costs Indirect materials $ 41,050 Indirect labor 176,800 Power 17,250 Repairs and maintenance 34,500 Depreciation—Building 24,000 Depreciation—Machinery 97,200 Taxes and insurance 16,200 Supervision 263,250 670,250 Total costs $ 1,336,650 rev: 04_27_2020_QC_CS-209738

Problem 08-3A Part 5 5. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.)

On 31 December 20X7, a company has the following bond on the statement of financial position:

On 28 February 20X8, 20% of the bond was retired for $1,804,000 plus accrued interest to 28 February. Interest was paid on this date only for the portion of the bonds that were retired. Premium amortization was recorded on this date in the amount of $660, representing amortization on the retired debt only.

Required:

Provide the entries to record the bond interest on 28 February and the bond retirement. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)

- Record the entry to update interest expense and amortization.

- Record the entry to retire bonds.

The following is a partial trial balance for General Lighting Corporation as of December 31, 2018: Account Title Debits Credits Sales revenue 2,650,000 Interest revenue 86,000 Loss on sale of investments 25,500 Cost of goods sold 1,250,000 Loss from write-down of inventory due to obsolescence 260,000 Selling expenses 360,000 General and administrative expenses 180,000 Interest expense 85,000 300,000 shares of common stock were outstanding throughout 2018. Income tax expense has not yet been recorded. The income tax rate is 40%. Required: 1. Prepare a single-step income statement for 2018, including EPS disclosures. 2. Prepare a multiple-step income statement for 2018, including EPS disclosures.

Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales.

The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $330,000 of manufacturing overhead for an estimated activity level of $200,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows:

During the year, the following transactions were completed:

1. Raw materials purchased on account, $275,000.
2. Raw materials used in production, $280,000 (materials costing $220,000 were charged directly to jobs; the remaining materials were indirect).
3. Costs for employee services were incurred as follows:

4. Rent for the year was $18,000 ($13,000 of this amount related to factory operations, and the remainder related to selling and administrative activities).
5. Utility costs incurred in the factory, $57,000.
6. Advertising costs incurred, $140,000.
7. Depreciation recorded on equipment, $100,000. ($88,000 of this amount related to equipment used in factory operations; the remaining $12,000 related to equipment used in selling and administrative activities.)
8. Record the manufacturing overhead cost applied to jobs.
9. Goods that had cost $675,000 to manufacture according to their job cost sheets were completed.
10. Sales for the year (all paid in cash) totaled $1,250,000. The total cost to manufacture these goods according to their job cost sheets was $700,000.

Required:

1. Prepare journal entries to record the transactions for the year.

2. Prepare T-accounts for each inventory account, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don’t forget to enter the beginning balances in your inventory accounts).

3A. Is Manufacturing Overhead underapplied or overapplied for the year?

3B. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.

4. Prepare an income statement for the year. (All of the information needed for the income statement is available in the journal entries and T-accounts you have prepared.)

Give specific example of the Quality Management Principle:

• Principle 7: Factual approach to decision making