1. The following information is available for the month of April from the First department of the Armque Corporation:

Materials are added in the beginning of the process in the First department. Using the average cost method, what are the equivalent units of production for the month of April?

2. The following information is available for the month of August from the First department of the Twigg Corporation:

Materials are added in the beginning of the process in the First department. Using the average cost method, what are the equivalent units of production for the month of August?

     3.   Information concerning Department A of Ali Company for the month of June is as follows:

All materials are added at the beginning of the process. Using the average cost method, the cost (rounded to two places) per equivalent unit for materials for June is:

     4.   Plemmon Company adds materials at the beginning of the process in the forming department, which is the first of two stages of its production cycle. Information concerning the materials used in the forming department in April follows:

Using the average cost method, what is the materials cost of the work in process at April 30 (rounded to nearest dollar)?

     5.   The following information is available for the month of April from the First department of the Armque Corporation:

Materials are added at the end of the process in the First department. Using the average cost method, what are the equivalent units of production for the month of April?

     6.   The following information is available for the month of August from the First department of the Twigg Corporation:

Materials are added at the end of the process in the First department. Using the average cost method, what are the equivalent units of production for the month of August?

     7.   During June, Birch Bay Company's Department B equivalent unit product costs computed under the average cost method were as follows:

Materials are introduced at the end of the process in Department B. There were 4,000 units (60 % complete as to conversion costs) in work in process at June 30. The total costs assigned to the June 30 work in process inventory should be:

Amasarcas Inc., is a wholesaler that distributes a single product. The company’s revenues and expenses for the last two months are given below:

Which of the expenses (A, B, C, D, and E) are variable? How can you tell?

Which of the expenses (A, B, C, D, and E) are fixed? How can you tell?

Which of the expenses (A, B, C, D, and E) are mixed? How can you tell?

6-5

Chavez Company most recently reconciled its bank statement and book balances of cash on August 31 and it reported two checks outstanding, No. 5888 for $1,097 and No. 5893 for $486. The following information is available for its September 30, 2017, reconciliation.

From the September 30 Bank Statement

From Chavez Company’s Accounting Records

Additional Information
Check No. 5904 is correctly drawn for $2,058 to pay for computer equipment; however, the recordkeeper misread the amount and entered it in the accounting records with a debit to Computer Equipment and a credit to Cash of $2,020. The NSF check shown in the statement was originally received from a customer, S. Nilson, in payment of her account. Its return has not yet been recorded by the company. The credit memorandum is from the collection of a $1,650 note for Chavez Company by the bank. The bank deducted a $21 collection fee. The collection and fee are not yet recorded.

2. Prepare the journal entries to adjust the book balance of cash to the reconciled balance. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Prepare journal entries to record the following transactions relating to long-term bonds of Ramirez, Inc. (Show computations)

a) On March 1, 2018, Ramirez, Inc. issued $10,000,000, 9% coupon rate bonds. The market interest rate was 12%. Interest is payable semiannually on February 1 and August 1 with the bonds maturing on February 1, 2021. Hint: This is a bond issued between interest dates.

b) On August 1, 2018, Ramirez paid interest on the bonds and recorded amortization. Ramirez uses effective-interest method of amortization.

c) On September 1, 2018. Ramirez purchased $6,000,000 face value (60% of initial issuance amount) of the bonds at the $6,200,000 PLUS accrued interest.

How will the reservation, purchase agreement, and the delivery of a Model 3 impact Tesla’s financial statements?

Since 2016, Tesla has been accepting reservations for its Model 3 car, which is a mid-size all electric four-door sedan. The long-range battery Model 3 (310 miles on a single charge) starts at $50,000, while the standard range battery Model 3 (220 miles) starts at $35,000. Production cannot keep up with demand for this model. Tesla produced and delivered 1,772 units during 2017. Tesla has said it plans to produce 5,000 units per week in the latter half of 2018. Currently there are more than 400,000 reservations for the Model 3, with 1,800 reservations being added per day. If a customer wants to purchase a Tesla Model 3, the customer will first make a reservation for a Model 3 which puts the customer in line. A reservation requires a $1,000 reservation payment. When the production of that customer’s Tesla would be scheduled within the next 1 – 3 months, Tesla invites the customer to place an actual order. The $1,000 reservation payment is applied to the customer’s purchase agreement. If the customer changes their mind at any point before making the purchase agreement, the $1,000 reservation payment is refundable to the customer. Full payment for the Model 3 (less the $1,000 reservation payment) is collected at the time of delivery to the customer.

Questions:

1. When Tesla receives a $1,000 reservation payment from a customer, what Tesla general ledger accounts does this $1,000 impact? Explain.

2. Now assume that a customer orders a Model 3 by completing the purchase agreement. Will this purchase agreement directly impact Tesla’s balance sheet or income statement at the date of the purchase agreement?

3. When the Model 3 is delivered to the customer and payment is received, how will Tesla’s balance sheet and income statement be impacted at the point of delivery?

3-3

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

Wells Technical Institute (WTI), a school owned by Tristana Wells, provides training to individuals who pay tuition directly to the school. WTI also offers training to groups in off-site locations. Its unadjusted trial balance as of December 31, 2017, follows. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of items athrough h that require adjusting entries on December 31, 2017, follow.
  
Additional Information Items

1. An analysis of WTI's insurance policies shows that $2,807 of coverage has expired.
2. An inventory count shows that teaching supplies costing $2,433 are available at year-end 2017.
3. Annual depreciation on the equipment is $11,227.
4. Annual depreciation on the professional library is $5,614.
5. On November 1, WTI agreed to do a special six-month course (starting immediately) for a client. The contract calls for a monthly fee of $2,700, and the client paid the first five months' fees in advance. When the cash was received, the Unearned Training Fees account was credited. The fee for the sixth month will be recorded when it is collected in 2018.
6. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $2,819 tuition per month payable at the end of the class. The class started on October 15, but no payment has yet been received. (WTI's accruals are applied to the nearest half-month; for example, October recognizes one-half month accrual.)
7. WTI's two employees are paid weekly. As of the end of the year, two days' salaries have accrued at the rate of $100 per day for each employee.
8. The balance in the Prepaid Rent account represents rent for December.

2-a. Post the balance from the unadjusted trial balance and the adjusting entries in to the T-accounts.
2-b. Prepare an adjusted trial balance.
  3-a. Prepare Wells Technical Institute's income statement for the year 2017.
3-b. Prepare Wells Technical Institute's statement of owner's equity for the year 2017.
3-c. Prepare Wells Technical Institute's balance sheet as of December 31, 2017.
  

Describe the uses and user of accounting information

Describe the financial reporting objectives of government sector

Exercise 8-14 (Algo) Sales and Production Budgets [LO8-2, LO8-3]

The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account):

The selling price of the company’s product is $12 per unit. Management expects to collect 75% of sales in the quarter in which the sales are made, 20% in the following quarter, and 5% of sales are expected to be uncollectible. The beginning balance of accounts receivable, all of which is expected to be collected in the first quarter, is $70,800.

The company expects to start the first quarter with 1,695 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter’s budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,895 units.

Required:

1. Calculate the estimated sales for each quarter of the fiscal year and for the year as a whole.

2. Calculate the expected cash collections for each quarter of the fiscal year and for the year as a whole.

3. Calculate the required production in units of finished goods for each quarter of the fiscal year and for the year as a whole.

eBook Cornerstone Exercise 6.10 (Algorithmic) Cost Information and the Weighted Average Method Morrison Company had the equivalent units schedule and cost information for its Sewing Department for the month of December, as shown below. Direct Materials Conversion Costs Units completed 46,000 46,000 Add: Units in ending work in process × Percentage complete: 20,000 × 100% direct materials 20,000 — 20,000 × 45% conversion materials — 9,000 Eqivalent units of output 66,000 55,000 Costs: Work in process, December 1: Direct materials $62,000 Conversion costs 10,000 Total work in process $72,000 Current costs: Direct materials $540,000 Conversion costs 180,000 Total current costs $720,000 Required: 1. Calculate the unit cost for December, using the weighted average method. Do NOT round interim calculations and, if required, round your answer to the nearest cent. $ per equivalent unit 2. Calculate the cost of goods transferred out, calculate the cost of EWIP, and reconcile the costs assigned with the costs to account for. Cost of goods transferred out: Units completed $ Cost of EWIP Total costs assigned (accounted for) $ Reconciliation Cost to account for: BWIP $ Current (December) Total $ 3. What if you were asked to show that the weighted average unit cost for materials is the blend of the November unit materials cost and the December unit materials cost? The November unit materials cost is $3.10 ($62,000/20,000), and the December unit materials cost is $11.74 ($540,000/46,000). The equivalent units in BWIP are 20,000, and the FIFO equivalent units are 46,000. Calculate the weighted average unit materials cost using weights defined as the proportion of total units completed from each source (BWIP output and current output). Do NOT round interim calculations and, if required, round your answer to the nearest cent. $ per unit

Audit Risk Model- Example 1

You are assigned to conduct the audit procedures for the inventory account at Tech Toys, a public company in the technology industry that sells the latest technology for fitness watches. Inventory obsolescence and the product’s susceptibility to theft is a business risk that management has identified for its inventory.  As part of your procedures you have to evaluate the overall risk assessment for the inventory account using the audit risk model.  Your team has decided that the acceptable level of overall audit risk for this account is Very Low or Low.  

You perform a walkthrough of Tech Toys’ process for its inventory, which includes internal controls surrounding the existence, completeness, and valuation of inventory.  Based on your walkthrough and test of control procedures, you find that Tech Toys has inadequate internal controls in place surrounding its inventory processes.

Given the above, what is the assigned level of risk (low, moderate, or high) for each of the components of the audit risk model that will enable a Very Low or Low level of audit risk for the inventory account? Briefly describe your judgment regarding the level of risk for each component.  What does your assessment for each of the components of the Audit Risk Model indicate about the nature, timing, and extent of substantive procedures that will be performed?

Audit Risk Model- Example 2

Assume instead that based on your walkthrough and test of control procedures, you find that Tech Toys has adequate internal controls in place surrounding its inventory processes.  How does this change your assessment?

Wanting to finalize a sale before year-end, on December 29, WR Outfitters sold to Bob a warehouse and the land for $213,000. The appraised fair market value of the warehouse was $101,250, and the appraised value of the land was $119,250. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)

a. What is Bob’s basis in the warehouse and in the land?

b. What would be Bob’s basis in the warehouse and in the land if the appraised value of the warehouse is $76,250, and the appraised value of the land is $144,250?

c. Which appraisal would Bob likely prefer?

1. Kipley Company is a small manufacturing firm located in Pittsburgh, Pennsylvania. The company has a workforce of both hourly and salaried employees. Each employee is paid for hours actually worked during each week, with the time worked being recorded in quarter-hour increments. The standard workweek consists of 40 hours, with all employees being paid time and one-half for any hours worked beyond the 40 regular hours.

   Wages are paid every Friday, with one week's pay being held back by the company. Assume that the first payday for Kipley Company is January 14 for the workweek ending January 8 (Saturday).

   You are being asked to complete Kipley's Payroll Register for the pay period ending January 8, 20--. Ms. Glenda B. Robey prepares the Time Clerk's Report for each pay period. This along with the Hourly Wage / Salary Report is provided.

   Requirement:

   1. Record the regular hours and the overtime hours worked for each employee, using the time clerk's report as your reference.
   2. Complete the Regular Earnings columns (Rate per Hour and Amount) for hourly employees. For only hourly employees that worked overtime, complete the Overtime Earnings columns (Rate per Hour and Amount).
      For salaried workers, complete the Regular Earnings column and show the hourly overtime rate and earnings only if overtime was worked.
   3. Record the Total Earnings for each employee by adding the Regular Earnings and the Overtime Earnings.

   Hourly Wage / Salary Report

   Hourly Wage / Salary Report

   Kipley's Hourly Wage / Salary Report is provided below, listing each employee's assigned time card number as well as their individual hourly rate or salary.

   Time Card No.	Employee Name	Hourly Wage or Salary
   11	Fran M. Carson	$17.50		per hour
   12	William A. Wilson	17.25		per hour
   13	Harry T. Utley	18.10		per hour
   21	Lawrence R. Fife	17.90		per hour
   22	Lucy K. Smith	19.75		per hour
   31	Gretchen R. Fay	515		per week
   32	Glenda B. Robey	2,700		per month
   33	Thomas K. Schork	3,350		per month
   51	Barbara T. Hardy	2,510		per month
   99	Carson C. Kipley	52,000		per year

   Time Clerk's Report

   Time Clerk's Report

   Ms. Glenda B. Robey prepares the time clerk's report for each pay period. Her report for the first week of operations is given below.

   Note: All employees, except for Carson Kipley, are paid for hours worked beyond 40 at one and one-half times their regular hourly rate of pay.

   TIME CLERK'S REPORT NO. 1 For Period Ending January 8, 20-- Employee Time Record Time Worked* Time Lost M T W T F S 11 Fran M. Carson 8 8 8 8 8 – 40 12 William A. Wilson 8 8 8 8 8 8 48 13 Harry T. Utley 8 5½ 8 8 8 – 37½ 2½ hrs. tardy 21 Lawrence R. Fife 10 10 8 8 10 – 46 22 Lucy K. Smith 8 8 8 8 8 – 40 31 Gretchen R. Fay 8 8 8 8 8 1¼ 41¼ 32 Glenda B. Robey 8 8 8 8 8 – 40 33 Thomas K. Schork 8 8 8 8 8 – 40 51 Barbara T. Hardy 8 8 8 8 8 4 44 99 Carson C. Kipley 8 8 8 8 8 – 40

   Payroll Register

   Payroll Register

   This is the first task to completing Kipley Company's payroll register. Complete the steps outlined below:

   1. Record the regular hours and the overtime hours worked for each employee, using the time clerk's report as your reference.
   2. Complete the Regular Earnings columns (Rate per Hour and Amount) for hourly employees. For only hourly employees that worked overtime, complete the Overtime Earnings columns (Rate per Hour and Amount).
      For salaried workers, complete the Regular Earnings column and show the hourly overtime rate and earnings only if overtime was worked.
   3. Record the Total Earnings for each employee by adding the Regular Earnings and the Overtime Earnings.

   If an amount box does not require an entry, leave it blank or enter "0". If required, round your intermediate calculations to the nearest cent and use the rounded amounts in subsequent computations. Round fraction values to the nearest two decimal places, e.g. 1 1/2 to 1.50.

   KIPLEY COMPANY, INC. Employee Payroll Register For Period Ending January 8, 20 --
   				Regular Earnings			Overtime Earnings
   Time Card No.	Name	Marital Status	No.W/H Allow.	Hours Worked	Rate per Hour	Amount	Hours Worked	Rate per Hour	Amount	Total Earnings
   11	Carson, F.	S	1		$	$		$	$	$
   12	Wilson, W.	S	0
   13	Utley, H.	M	2
   21	Fife, L.	M	4
   22	Smith, L.	S	2
   31	Fay, G.	M	3		………
   32	Robey, G.	M	6		………
   33	Schork, T.	S	1		………
   51	Hardy, B.	M	5		………
   99	Kipley, C.	M	7		………
   Totals						$	………	………	$	$

Check My Work

On the basis of your research and findings your paper should address the following: Do a cost-benefit analysis of the selected healthcare organization. Explain your analysis of the cost-benefit ratio and how it helps an organization. Explain the impact of the cost-benefit ratio on recruitment and retention strategies of a healthcare organization. Outline ways to improve the cost-benefit ratio of the selected healthcare organization. Explain the role of HRM in ensuring the most competitive compensation package for employees. Describe methods of improving the compensation package of the selected healthcare organization. Explain how your recommendations could enhance recruitment and retention strategies of the organization. Discuss how you would address competitive compensation, benefits packages, career development, and succession planning in working towards the selected healthcare organization's strategic goals.

Ratios from Comparative and Common-Size Data
Consider the following financial statements for Waverly Company. During 2013, management obtained additional bond financing to enlarge its production facilities. The company faced higher production costs during the year for such things as fuel, materials, and freight. Because of temporary government price controls, a planned price increase on products was delayed several months.
As a holder of both common and preferred stock, you decide to analyze the financial statements:

Required
a. Calculate the following for each year: current ratio, quick ratio, operating-cash-flow-to-current liabilities ratio (current liabilities were $78,000,000 at January 1, 2012), inventory turnover (inventory was $87,000,000 at January 1, 2012), debt-to-equity ratio, times-interest-earned ratio, return on assets (total assets were $493,000,000 at January 1, 2012), and return on common stockholders' equity (common stockholders' equity was $236,000,000 at January 1, 2012).
b. Calculate common-size percentages for each year's income statement.

Round answers to two decimal places.

Round answers to one decimal place.