Exercise: 2 The adjusted trial balance of Ahmed Company on December 31, 2017 includes the following accounts: Accumulated Depreciation, $6,000; Depreciation Expense, $2,000; Note Payable $7,500; Interest Expense $150; Utilities Expense, $300; Rent Expense, $500; Service Revenue, $19,600; Salaries Expense, $4,000; Supplies, $200; Supplies Expense, $1,200; Wages Payable, $600. Required: Prepare an income statement for the month of December.

Prepare journal entries to record the following transactions of Weatherford Teen Foundation, Inc. (WTFI), a nonprofit entity that provides counseling, training, and other programs for young people. WTFI accounts for all transactions in a single fund, recording them so as to distinguish between net assets with donor restrictions and net assets without donor restrictions as required for financial reporting purposes.

1. WTFI receives pledges of $150,000 to help finance its activities for the year. WTFI expects that it will ultimately receive 90% of these pledges in cash.
2. During the year, WTFI receives cash of $130,000 against the pledges and writes off $10,000 of the pledges as uncollectible.
3. WTFI incurs the following program expenses, financed by its unrestricted revenues:
   • Counseling programs, $40,000
   • Training programs, $50,000
4. WTFI has a contract with the county in which it is located to administer a youth recreation program. It incurs $20,000 of expenses under the program, and sends an invoice to the county for that amount.
5. Carole Burgess donates $5,000, stipulating that WTFI must use her gift to obtain the services of a well-known country singer for a special concert.
6. WTFI gives the concert referred to in e. WTFI pays $5,000 to the country singer, and charges the expense to Recreation programs.
7. David Bean, a local attorney, donates 10 hours of his time to WTFI drawing up legal contracts. Mr. Bean also donates 20 hours coaching softball for the youths. He normally charges $200 an hour for his legal services. WTFI would have hired an attorney and a coach to do this work if Mr. Bean had not volunteered his time.
8. Mary Catlett donates common stock to WTFI, stipulating that the stock must be used during WTFI’s next fiscal year for any programs WTFI wishes to undertake. At the time of the gift, the stock has a fair value of $10,000.
9. When WTFI closes its books at year-end, the stock gift from Ms. Catlett has a fair value of $11,000.

Miller Company’s contribution format income statement for the most recent month is shown below:

Miller Company’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (37,000 units) $ 185,000 $ 5.00 Variable expenses 74,000 2.00 Contribution margin 111,000 $ 3.00 Fixed expenses 44,000 Net operating income $ 67,000 Required: (Consider each case independently):

1. What is the revised net operating income if unit sales increase by 13%?

2. What is the revised net operating income if the selling price decreases by $1.20 per unit and the number of units sold increases by 18%?

3. What is the revised net operating income if the selling price increases by $1.20 per unit, fixed expenses increase by $7,000, and the number of units sold decreases by 4%?

4. What is the revised net operating income if the selling price per unit increases by 10%, variable expenses increase by 10 cents per unit, and the number of units sold decreases by 5%?

true or false?

On January 1, 20X8, Liv Ltd. (LL), a Canadian company, acquired 90% of Marcus Co. (MC), a foreign company for FC 623,200. At the acquisition date, the carrying value of MC’s net assets equaled their fair value except for the equipment, which had a carrying value of FC 800,000 and a fair value of FC 880,000. At the acquisition date, MC’s equipment had a remaining useful life of 10 years. There was an FC 4,000 impairment of the goodwill which occurred evenly throughout 20X8.

Selected financial statements for LL and MC are presented below.

Liv Ltd.

Statement of Financial Position
As of December 31, 20X8

(in $ CDN)

Assets:
Noncurrent assets:
Plant and equipment, net 2,752,000
Investment in Marcus Co. 1,371,040
4,123,040

Current assets:

Inventory 1,376,000
Accounts receivable 700,000
Cash and cash equivalents 562,080

2,638,080
Total assets 6,761,120

Shareholders’ Equity:

Share capital 1,376,000
Retained earnings 2,601,520
3,977,520
Liabilities:
Noncurrent liabilities:

Notes payable 1,860,000

Current liabilities:

Accounts payable and accrued liabilities 923,600
Total liabilities 2,783,600
Total shareholders’ equity and liabilities 6,761,120

Liv Ltd.

Statement of Income

For the year ended December 31, 20X8

(in $ CDN)

Sales 16,472,000

Dividend income 180,080

16,652,080

Cost of sales 8,256,000
Other expenses* 7,124,000 15,380,000

Net income 1,272,080

*includes depreciation

LL declared and paid dividends of $928,000 CDN on December 31, 20X8.

Marcus Co.

Statement of Financial Position

(in FC)

Dec. 31, Jan. 1
20X8 20X8

Assets:

Noncurrent assets:

Equipment, net 720,000 800,000

Current assets:

Inventory 484,000 364,000

Accounts receivable 408,000 280,000

Cash 360,000 164,000

1,252,000 808,000

Total assets 1,972,000 1,608,000

Shareholders’ equity:

Share capital 400,000 400,000
Retained earnings 390,000 146,000

790,000 546,000

Liabilities:

Noncurrent liabilities:

Notes payable 640,000 640,000

Current liabilities:

Accounts payable 542,000 422,000

Total liabilities 1,182,000 1,062,000

Total shareholders’ equity and liabilities 1,972,000 1,608,000

Marcus Co.

Statement of Income

For the year ended December 31, 20X8

(in FC)

Sales 8,400,000
Cost of sales 5,304,000
Other expenses* 2,688,000 7,992,000

408,000

*includes depreciation

Marcus Co.

Statement of Changes in Equity – Retained Earnings Section

For the year ended December 31, 20X8

(in FC)

Retained earnings, January 1, 20X8 146,000
Net income 408,000

Dividends declared (164,000)

Retained earnings, December 31, 20X8 390,000

MC declared and paid FC164,000 in dividends on December 31, 20X8.

Selected Exchange Rates

January 1, 20X8 FC1 = $2.20 CDN
December 31, 20X8 FC1 = $2.44 CDN

Date when ending inventory was purchased FC1 = $2.38 CDN

Average rate for 20X8 FC1 = $2.32 CDN

Required:

1. Prepare consolidated financial statements at December 31, 20X8 under each of the following assumptions:
   
   i) the functional currency is $CAD, and
   ii) the functional currency is the FC.

Direct Labor Time Variance

Maywood City Police uses variance analysis to monitor police staffing. The following table identifies three common police activities, the standard time to perform each activity, and their actual frequency to establish the expected cost to serve these activities.

The police are paid $25 per hour.

The actual amount of hours per activity for the year were as follows:

a. Determine the total budgeted cost to perform the three police activities.
Total budgeted cost $

b. Determine the total actual cost to perform the three police activities.
Total actual cost $

c. Determine the direct labor time variance.
$

n calculating unit cost in a process costing system, "conversion cost" is defined as the sum of:

Units accounted for includes units completed and transferred out plus:

Matrix Inc. calculates cost for an equivalent unit of production using both the weighted-average and the FIFO methods.

The cost of goods completed and transferred out under the weighted-average method is calculated to be:

Talamoto Co. manufactures a single product that goes through two processes — mixing and cooking. The following data pertains to the Mixing Department for September.

Material P is added at the beginning of work in the Mixing Department. Material Q is also added in the Mixing Department, but not until units of product are forty percent completed with regard to conversion. Conversion costs are incurred uniformly during the process.

Total equivalent units for Material P under the weighted-average method are calculated to be:

In 250 words please explain FASB Codification 105-10-65-5; Generally Accepted Accounting Principles, Overall, Transition and Open Effective Date Information.

In the table below, there are test scores from a dozen students. The test was worth 200 points. The scores in the table are the # of points out of 200. Letter grades will be assigned using the standard grade boundaries given below.

You will need to create a new Excel file for this assignment.

1. Create a worksheet with the columns of student names and scores as shown above.
2. Add a column to the right of Test Score labeled “Percentage”
3. Add a column to the right of Percentage labeled “Letter grade”
4. Using absolute addressing, calculate the corresponding percentage score for each student. You must utilize absolute addressing in this formula. (hint – put the total possible score in one separate cell someplace in your worksheet and use it for the first student, then copy and paste).
5. Use the AVERAGE function to calculate the average percentage and display with a label of “Average Percentage”.
6. Use the MAX function to calculate the highest percentage score and display with a label of “Maximum Percentage.”
7. Using VLOOKUP, determine and display the letter grade for each student.
8. PLEASE SHOW FORMULAS FOR EACH ENTRY

Read the scenario below, and address the subsequent requirements.

Emma is the plant manager of an electronics company. Plant managers are paid a salary and get an additional bonus equal to 5% of their base salary if their division meets or exceeds target profits for the year. The bonus is determined after the company’s annual financial report has been prepared and issued to shareholders.

Emma’s division uses a process costing system where the estimate of the percentage completion of ending work in process inventories affects the unit costs of finished goods and therefore the cost of goods sold. (All units completed and transferred out of the final processing department were sold.)

Emma just received preliminary profit figures for her division which show it is within $200,000 of making the year’s target profits. To earn her bonus, Emma simply needs to convince James, her lead production supervisor, to increase the estimate of the percentage complete of ending work in process inventory. James has already submitted the percentage completion figures to corporate headquarters.

In your post, address the following questions:

1. What are the ethical issues in this process costing environment? What are the risks?

2. Do you think Joe should go along with Emma's request to alter estimates of the percentage completion? Why or why not?

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 were 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.

Questions

1. As a plant employee, what is your responsibility to report your findings to superiors?
2. Should you attempt to determine if the redundancy is justified? Explain.
3. What is your responsibility to the employees whose jobs will likely be lost by your report?
4. What facts should you consider before making your decision to report or not?

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

Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below:

Beech’s managers have made the following additional assumptions and estimates:

1. Estimated sales for July, August, September, and October will be $220,000, $240,000, $230,000, and $250,000, respectively.

2. All sales are on credit and all credit sales are collected. Each month’s credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at June 30 will be collected in July.

3. Each month’s ending inventory must equal 25% of the cost of next month’s sales. The cost of goods sold is 75% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July.

4. Monthly selling and administrative expenses are always $40,000. Each month $6,000 of this total amount is depreciation expense and the remaining $34,000 relates to expenses that are paid in the month they are incurred.

5. The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30.

Required:

1. Prepare a schedule of expected cash collections for July, August, and September.

2-a. Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30.

2-b. Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September.

3. Prepare an income statement for the quarter ended September 30.

4. Prepare a balance sheet as of September 30.

[The following information applies to the questions displayed below.] Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below: Beech Corporation Balance Sheet June 30 Assets Cash $ 80,000 Accounts receivable 135,000 Inventory 41,250 Plant and equipment, net of depreciation 211,000 Total assets $ 467,250 Liabilities and Stockholders’ Equity Accounts payable $ 72,000 Common stock 345,000 Retained earnings 50,250 Total liabilities and stockholders’ equity $ 467,250 Beech’s managers have made the following additional assumptions and estimates: Estimated sales for July, August, September, and October will be $220,000, $240,000, $230,000, and $250,000, respectively. All sales are on credit and all credit sales are collected. Each month’s credit sales are collected 45% in the month of sale and 55% in the month following the sale. All of the accounts receivable at June 30 will be collected in July. Each month’s ending inventory must equal 15% of the cost of next month’s sales. The cost of goods sold is 70% of sales. The company pays for 30% of its merchandise purchases in the month of the purchase and the remaining 70% in the month following the purchase. All of the accounts payable at June 30 will be paid in July. Monthly selling and administrative expenses are always $40,000. Each month $6,000 of this total amount is depreciation expense and the remaining $34,000 relates to expenses that are paid in the month they are incurred. The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30. Required: 1. Prepare a schedule of expected cash collections for July, August, and September. Also compute total cash collections for the quarter ended September 30. 2-a. Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30. 2-b. Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September. Also compute total cash disbursements for merchandise purchases for the quarter ended September 30. 3. Prepare an income statement for the quarter ended September 30. 4. Prepare a balance sheet as of September 30.

Define coupon and market/effective interest rates as they determine bond pricing at par, premium, or discount values.

1. Determine the proper tax year for gross income inclusion in each of the following cases

1. A cash basis landlord makes new tenants pay first and last month’s rent at the start of the lease.  How does the landlord report these items?

2. Purple Corporation, an exterminating company, is a calendar year taxpayer.  It contracts to provide service to homeowners once a month under a one- two- or three-year contact.  For financial reporting purposes, Purple reports the income ratably over the months of the contract. On April 1 of the current year, the company sold a customer a one-year contract for $120.  How much of the $120 is taxable in current and subsequent year if the company is an accrual basis taxpayer? If the $120 is payment on a two-year contract, how much is taxed in the year of the contract is sold and in the following years?  If the $120 is payment on a three-year contract, how much is taxed in the year the contract is sold and in the following years? (10 points)