Question: Jefferson County’s General Fund began the year 2017 with the following account balances: Deb... (4 bookmarks) Jefferson County’s General Fund began the year 2017 with the following account balances: Debits Credits Cash $132,348 Taxes Receivable 47,220 Allowance for Uncollectible Taxes $ 1,570 Supplies 660 Deferred Inflows—Property Taxes 21,000 Wages Payable 900 Fund Balance 156,758 Totals $180,228 $180,228 During 2017, Jefferson experienced the following transactions: The budget was passed by the County Commission, providing estimated revenues of $285,000 and appropriations of $235,000 and estimated other financing uses of $40,000. Encumbrances totaling $4,800 outstanding at December 31, 2016, were re-established. The Deferred Inflows—Property Taxes at December 31, 2016, is recognized as revenue in the current period. Property taxes in the amount of $290,000 were levied by the County. It is estimated 0.5 percent (1/2 of 1 percent) will be uncollectible. Property tax collections totaled $263,400. Accounts totaling $1,020 were written off as uncollectible. Encumbrances were issued for supplies in the amount of $37,100. Supplies in the amount of $40,500 were received. Jefferson County records supplies as an asset when acquired. The related encumbrances for these items totaled $41,000 and included the $4,800 encumbered last year. The County paid $37,800 on accounts payable during the year. The County contracted to have alarm systems (capital assets) installed in the administration building at a cost of $46,000. The systems were installed and the amount was paid.page 115 Paid wages totaling $135,900, including the amount payable at the end of 2016. (These were for general government operations.) Paid other general government operating items of $7,600. The General Fund transferred $43,000 to the debt service fund in anticipation of bond interest and principal payments. Additional Information Wages earned but unpaid at the end of the year amounted to $1,050. Supplies of $350 were on hand at the end of the year. (Supplies are used for general government operations.) A review of property taxes receivable indicates that $22,000 of the outstanding balances would likely be collected more than 60 days after year-end and should be deferred. Required: Use the Excel template provided on the textbook website to complete the following requirements. A separate tab is provided in Excel for the following items: Prepare journal entries to record the information described in items 1 to 14. Classify expenditures in the General Fund as either General Government or Capital Outlay. Make entries directly to these and the individual revenue accounts; do not use subsidiary ledgers. Post these entries to T-accounts. Prepare closing journal entries; post to the T-account provided. Classify fund balances assuming there are no restricted or committed net resources and the only assigned net resources are the outstanding encumbrances. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the General Fund for the year ending 2017. Use Excel formulas to calculate the cells shaded in blue. Prepare a Balance Sheet for the General Fund as of December 31, 2017.

Oriole Company was organized on July 1, 2019. Quarterly financial statements are prepared. The unadjusted and adjusted trial balances as of September 30 are shown as follows. Journalize the adjusting entries that were made AND create an income statement, retained earnings, and balance sheet.

The following information applies to the questions displayed below.]

Markus Company’s common stock sold for $3.25 per share at the end of this year. The company paid a common stock dividend of $0.65 per share this year. It also provided the following data excerpts from this year’s financial statements:     

2. What is the price-earnings ratio? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

4. What is the return on total assets (assuming a 30% tax rate)? (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)

6. What is the book value per share at the end of this year? (Round your answer to 2 decimal places.)      

8. What is the acid-test ratio at the end of this year? (Round your answer to 2 decimal places.)

TOPIC: MANAGEMENT ACCOUNTING IN PUBLIC SECTOR

Explain the rational for the administrative changes in budget examination and review from yearly basis to once in every two years basis

--An organization has just received a Qualified Auditor report. Auditors have reported the contravention about the director’s superannuation not being paid for the past 2 years. Prepare a list of suggestions to management to rectify this contravention; your answer should focus on the rectification to the internal control system to prevent this contravention in future.

The following adjusted trial balance contains the accounts and year-end balances of Cruz Company as of December 31.

1. Prepare the December 31, closing entries for Cruz Company. Assume the account number for Income Summary is 901.
2. Prepare the December 31, post-closing trial balance for Cruz Company. Note: A. Cruz, Capital was $42,739 on December 31 of the prior year.

DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating its suppliers and moving toward Lean Production. Many adjustment problems have been encountered, including problems relating to performance measurement. After much study, the company has decided to use the performance measures below, and it has gathered data relating to these measures for the first four months of operations.

Management has asked for your help in computing throughput time, delivery cycle time, and MCE. The following average times have been logged over the last four months:

Required:

1-a. Compute the throughput time for each month.

1-b. Compute the delivery cycle time for each month.

1-c. Compute the manufacturing cycle efficiency (MCE) for each month.

2. Evaluate the company’s performance over the last four months.

3-a. Refer to the move time, process time, and so forth, given for month 4. Assume that in month 5 the move time, process time, and so forth, are the same as in month 4, except that through the use of Lean Production the company is able to completely eliminate the queue time during production. Compute the new throughput time and MCE.

3-b. Refer to the move time, process time, and so forth, given for month 4. Assume in month 6 that the move time, process time, and so forth, are again the same as in month 4, except that the company is able to completely eliminate both the queue time during production and the inspection time. Compute the new throughput time and MCE.

E19-14: Callaway Corp. has a deferred tax asset balance of $150,000 at the end of 2013 due to a single cumulative temporary difference of $375,000. At the end of 2014, this same temporary difference has increased to a cumulative amount of $450,000. Taxable income for 2014 is $820,000. The tax rate is 40% for all years. No valuation account is in existence at the end of 2013.

1. Record income tax expense, deferred income taxes, and income taxes payable for 2014 assuming that it is more likely than not that the deferred tax asset will be realized.
2. Assuming that it is more likely than not that $30,000 of the deferred tax asset will not be realized, prepare the journal entry at the end of 2014 to record the valuation account.
3. What if Congress enacts a new tax rate equal to 35% effective 1/1/15?

1. Cash is the asset most susceptible to improper diversion and use. Have you ever found yourself, either as a customer or as an employee, in a position to misappropriate cash? If so, describe the internal control weakness that created the situation. What control(s) would have addressed the problem?

2. Organizations have long used cameras to monitor employees' activities. Now, computer software can monitor employees’ use of their computer (for example, tracking what websites they visit), often without the employees’ knowledge. In your opinion, is such monitoring an appropriate component of internal control?

LIFO Perpetual Inventory

The beginning inventory of merchandise at Dunne Co. and data on purchases and sales for a three-month period ending June 30 are as follows:

Required:

1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4, using the last-in, first-out method. Under LIFO, if units are in inventory at two different costs, enter the units with the HIGHER unit cost first in the Cost of Merchandise Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column.

2. Determine the total sales, the total cost of merchandise sold, and the gross profit from sales for the period.

3. Determine the ending inventory cost on June 30.
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WoolCo buys sheep’s wool from farmers. The company began operations in January of this year, and is making decisions on product offerings, pricing, and vendors. The company is also examining its method of assigning overhead to products. You’ve just been hired as a production manager at WoolCo.

Currently WoolCo makes three products: (1) raw, clean wool to be used as stuffing or insulation; (2) wool yarn for use in the textile industry, and (3) extra-thick yarn for use in rugs.

The company would like you to evaluate its costing methods for its raw wool and wool yarn. Upper management would also like your recommendations regarding a production decision regarding their current and proposed product lines.

Traditional costing allocates overhead costs to products based upon a predetermined factory overhead rate, which is computed using an estimated activity base such as direct labor hours or machine hours. The rate is computed as follows:

Predetermined Factory Overhead Rate = (Estimated Total Factory Overhead Costs) ÷ (Estimated Activity Base)

WoolCo has been using traditional costing with combing machine hours as the activity base. The company would like to consider activity-based costing

A cost allocation method that identifies activities causing the incurrence of costs and allocates these costs to products (or other cost objects), based on activity drivers (bases).

. In order to understand their current system better, you evaluate WoolCo’s current method of costing for raw wool and wool yarn. The production staff has compiled the following information for you on the production of 500 pounds of either raw wool or wool yarn:

In the following table, use combing machine hours as the activity base for assigning overhead costs to each product. When required, round your answers to the nearest dollar.

Predetermined factory overhead rate: per direct labor hour

Points:

Sole Purpose Shoe Company

Sole Purpose Shoe Company is owned and operated by Sarah Charles. The company manufactures casual shoes, with manufacturing facilities in your state. Sarah began the business this year, and while she has a great deal of experience in manufacturing popular and comfortable shoes, she needs some help in evaluating her results for the year, and asks for your help.

Under normal conditions, Sarah spends $8.40 per unit of materials, and it will take 3.6 units of material per pair of shoes. During July, Sole Purpose Shoe Company incurred actual direct materials costs of $63,101 for 7,090 units of direct materials in the production of 2,175 pairs of shoes.

Complete the following table, showing the direct materials variance relationships for July for Sole Purpose Shoe Company. If required, round your answers to two decimal places. When entering variances, use a negative number for a favorable cost variance

A variance that occurs when the actual cost is less than standard cost.

, and a positive number for an unfavorable cost variance

A variance that occurs when the actual cost exceeds the standard cost.

.

Points:

0 / 18

Feedback

Check My Work

Review Exhibit 6

Under normal conditions, Sarah pays her employees $8.50 per hour, and it will take 2.8 hours of labor per pair of shoes. During August, Sole Purpose Shoe Company incurred actual direct labor costs of $65,148 for 7,320 hours of direct labor in the production of 2,300 pairs of shoes.

Complete the following table, showing the direct labor variance relationships for August for Sole Purpose Shoe Company. If required, round your answers to two decimal places. When entering variances, use a negative number for a favorable variance, and a positive number for an unfavorable variance.

Points:

0 / 18

Feedback

Check My Work

Review Exhibit 7 in the text.

Shaded cells have feedback.

Sarah has learned a lot from you over the past two months, and has compiled the following data for Sole Purpose Shoe Company for September using the techniques you taught her. She would like your help in preparing a Budget Performance Report

A report comparing actual results with budget figures.

for September. The company produced 2,500 pairs of shoes that required 8,750 units of material purchased at $8.20 per unit and 6,750 hours of labor at an hourly rate of $8.90 per hour during the month. Actual factory overhead during September was $21,000. When entering variances, use a negative number for a favorable cost variance, and a positive number for an unfavorable cost variance.

Use the data in the following table to prepare the Budget Performance Report for Sole Purpose Shoe Company for September.

Question not attempted.

Score: 0/48

Solution

Points:

0 / 12

Feedback

Check My Work

Review Exhibit 3 and computations for the amounts in the report.

in the text.

You are about to start working at car dealership that is currently reporting losses due to flooding but will be profitable in a few years. Assume you’re your risk adverse and your supervisor cannot fully monitor your actions. The key metrics at this dealership include both financial data (number of sales, margin on sales) as well as qualitative data (survey of experience). You are tasked with designing a compensation contract.

1. Define in your own terms moral hazard and adverse-selection. Describe how the firm may want to establish a compensation contract for you given moral hazard and adverse selection issues.

2. Does this change depending on your level of risk aversion?

3. Discuss both tax and nontax factors from both the employee and employers perspective.  

4. Suppose a firm has a tax loss in the current period of $200, which when added to prior tax losses gives it an NOL carryforward of $300. The top statutory tax rate is 21%. Assume an after-tax discount rate of 10% and future taxable income of $50 per year. What is the firm’s marginal explicit tax rate?

5. Create the compensation contract with points 1-4 in mind. Keep this contract to a single page. You will be graded on creativity, presentation, and writing clarity.

Foam Products, Inc., makes foam seat cushions for the automotive and aerospace industries. The company’s activity-based costing system has four activity cost pools, which are listed below along with their activity measures and activity rates:

The company just completed a single order from Interstate Trucking for 2,200 custom seat cushions. The order was produced in three batches. Each seat cushion required 0.7 direct labor-hours. The selling price was $141.90 per unit, the direct materials cost was $103 per unit, and the direct labor cost was $14.30 per unit. This was Interstate Trucking’s only order during the year.

Required:

Calculate the customer margin on sales to Interstate Trucking for the year.