Situation 1

Honest Andrea’s Auto Dealer purchases used cars at auto auctions and sells them retail. The autos, on average, sell for approximately $20,000 each and cost Andrea $13,000. The costs that the company incurs in a typical month are listed below:

Costs                                                                                 Cost Formula

Selling:

      Advertising                                                                 $3,800 per month

      Preparation of Autos for Delivery                              $    750 per auto sold

      Sales salaries & commissions                                      $4,500 per month, plus 7% of sales

      Utilities                                                                       $5,200 per month

      Depreciation on sales facility                                      $4,500 per month

Administrative:

      Executive salaries                                                        $14,000 per month

      Depreciation on office equipment                              $2,200 per month

      Clerical staff salaries                                                   $3,500 per month

      Insurance                                                                     $1,800 per month

During April, Honest Andrea’s sold 65 autos.

Required

Prepare a traditional income statement as of April 30. All numbers should be rounded to the nearest dollar.

Prepare a contribution format income statement as of April 30. All numbers should be rounded to the nearest dollar. Show costs and revenues on both a total and per unit basis down through the contribution margin.

What costs does the Contribution Margin Income Statement format isolate (make apparent) that the Traditional Income Statement format does not?

For the statement you prepared for Part 2, why might it be misleading to show the fixed costs on a per unit basis?

You run a hospital with 100 rooms. Fixed daily cost is $988.00 which includes staff salary, property charges, maintenance etc. Variable cost per room is $12.00 which includes cleaning, equipment rentals, utility cost etc. which is incurred only when the room is full. You charge $84.00 per room per day. You sold 37.00 rooms today, how much profit/loss did you earn for today.

Explain the difference between operating and financing liabilities. In addition, discuss the implications of lease accounting for the analysis of financial statements.

writing 275 words about. News or advices you could give your clients as you Finanical planner.

Superior Markets, Inc., operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below:

The North Store has consistently shown losses over the past two years. For this reason, management is giving consideration to closing the store. The company has asked you to make a recommendation as to whether the store should be closed or kept open. The following additional information is available for your use:

1. The breakdown of the selling and administrative expenses that are shown above is as follows:

*Allocated on the basis of sales dollars.

*Allocated on the basis of sales dollars.

2. The lease on the building housing the North Store can be broken with no penalty.

3. The fixtures being used in the North Store would be transferred to the other two stores if the North Store were closed.

4. The general manager of the North Store would be retained and transferred to another position in the company if the North Store were closed. She would be filling a position that would otherwise be filled by hiring a new employee at a salary of $10,800 per quarter. The general manager of the North Store would continue to earn her normal salary of $11,800 per quarter. All other managers and employees in the North store would be discharged.

5. The company has one delivery crew that serves all three stores. One delivery person could be discharged if the North Store were closed. This person’s salary is $4,500 per quarter. The delivery equipment would be distributed to the other stores. The equipment does not wear out through use, but does eventually become obsolete.

6. The company pays employment taxes equal to 15% of their employees' salaries.

7. One-third of the insurance in the North Store is on the store’s fixtures.

8. The “General office salaries” and “General office—other” relate to the overall management of Superior Markets, Inc. If the North Store were closed, one person in the general office could be discharged because of the decrease in overall workload. This person’s compensation is $5,900 per quarter.

Required:

1. How much employee salaries will the company avoid if it closes the North Store?

2. How much employment taxes will the company avoid if it closes the North Store?

3. What is the financial advantage (disadvantage) of closing the North Store?

4. Assuming that the North Store's floor space can’t be subleased, would you recommend closing the North Store?

5. Assume that the North Store's floor space can’t be subleased. However, let's introduce three more assumptions. First, assume that if the North Store were closed, one-fourth of its sales would transfer to the East Store, due to strong customer loyalty to Superior Markets. Second, assume that the East Store has enough capacity to handle the increased sales that would arise from closing the North Store. Third, assume that the increased sales in the East Store would yield the same gross margin as a percentage of sales as present sales in the East store. Given these new assumptions, what is the financial advantage (disadvantage) of closing the North Store?

In 2020, Ibran Corp. required additional cash for its business. Management decided to use accounts receivable to raise the additional cash and has asked you to determine the income statement effects of the following transactions:

1. On July 1, 2020, Ibran assigned $600,000 of accounts receivable to Provincial Finance Corporation as security for a loan. Ibran received an advance from Provincial Finance of 90% of the assigned accounts receivable less a commission of 3% on the advance. Before December 31, 2020, Ibran collected $220,000 on the assigned accounts receivable, and remitted $232,720 to Provincial Finance. Of the latter amount, $12,720 was interest on the advance from Provincial Finance.

2. On December 1, 2020, Ibran sold $300,000 of accounts receivable to Wunsch Corp. for $275,000. The receivables were sold outright on a without recourse basis and Ibran has no continuing interest in the receivables.

3. On December 31, 2020, an advance of $120,000 was received from First Bank by pledging $160,000 of Ibran's accounts receivable. Ibran's first payment to First Bank is due on January 30, 2021. Instructions a. Prepare a schedule showing the income statement effects of 1004 these transactions for the year ended December 31, 2020.

Instructions
a. Prepare a schedule showing the income statement effects of
these transactions for the year ended December 31, 2020.

Computing Return on Equity and Return on Assets
The following table contains financial statement information for Wal-Mart Stores, Inc.

(a) Compute the return on equity (ROE) for 2014 and 2015. (Round your answers to one decimal place.)
2015 ROE =Answer

%
2014 ROE =Answer

%

What trend, if any, is evident? How does Wal-Mart's ROE compare with the approximately 18.9% median ROE for companies in the Dow Jones Industrial average for 2015?

Wal-Mart's ROE decreased from 2014 to 2015 and is lower to the median for other companies in the Dow Jones average.

Wal-Mart's ROE increased slightly from 2014 to 2015 and is slightly above the median for other companies in the Dow Jones average.

Wal-Mart's ROE increased from 2014 to 2015 but is lower than the median for other companies in the Dow Jones average.

Wal-Mart's ROE decreased from 2014 to 2015 but still exceeds the median for other companies in the Dow Jones average.

Mark 1.00 out of 1.00

(b) Compute the return on assets (ROA) for 2014 and 2015. (Round your answers to one decimal place.)
2015 ROA =Answer

%
2014 ROA =Answer

%

What trend, if any, is evident? How does Wal-Mart's ROA compare with the approximately 7.1% median ROA for companies in the Dow Jones Industrial average for 2015?

Wal-Mart's ROA increased slightly from 2014 to 2015 and is above the median for other Dow Jones companies.

Wal-Mart's ROA decreased from 2014 to 2015 and is lower than the median for other Dow Jones companies.

Wal-Mart's ROA increased from 2014 to 2015 but is slightly below the median for other Dow Jones companies.

Wal-Mart's ROA decreased slightly from 2014 to 2015 but still exceeds the median for other Dow Jones companies.

Mark 1.00 out of 1.00

(c) Which of the following factors might allow a company like Wal-Mart Stores, Inc to reap above-average returns?

Wal-Mart Stores, Inc operates with more assets and equity than the average company.

Wal-Mart Stores, Inc's spends very little on advertising, thus generating a greater profit on sales.

Wal-Mart has considerable market power over suppliers as a result of its considerable size, which may result in product cost savings.

Wal-Mart Stores, Inc's sales level is greater than the typical company.

Problem 13-10 Prepare a Statement of Cash Flows; Free Cash Flow [LO13-1, LO13-2, LO13-3]

Joyner Company’s income statement for Year 2 follows:

Its balance sheet amounts at the end of Years 1 and 2 are as follows:

Equipment that had cost $31,200 and on which there was accumulated depreciation of $10,200 was sold during Year 2 for $29,000. The company declared and paid a cash dividend during Year 2. It did not retire any bonds or repurchase any of its own stock.

Required:

1. Using the indirect method, compute the net cash provided by/used in operating activities for Year 2.

2. Prepare a statement of cash flows for Year 2.

3. Compute the free cash flow for Year 2.

Free cash flow:______

Explain three (3) reasons when a manufacturing company would consider implementing an activity based costing system.

Handy Hardware is a retail hardware store. Information about the store’s operations follows.

• November 20x1 sales amounted to $200,000. • Sales are budgeted at $220,000 for December 20x1 and $200,000 for January 20x2.

• Collections are expected to be 60 percent in the month of sale and 38 percent in the month follow-ing the sale. Two percent of sales are expected to be uncollectible. Bad debts expense is recognized monthly.

• The store’s gross margin is 25 percent of its sales revenue.

• A total of 80 percent of the merchandise for resale is purchased in the month prior to the month of sale, and 20 percent is purchased in the month of sale. Payment for merchandise is made in the month following the purchase.

• Other monthly expenses paid in cash amount to $22,600.

• Annual depreciation is $216,000.

The company’s balance sheet as of November 30, 20x1, is as follows:

HANDY HARDWARE, INC.

Balance Sheet

November 30, 20x1

Assets

Cash ..........................................................................................................................................................................$    22,000

Accounts receivable (net of $3,500 allowance for uncollectible accounts) ..........................................................76,000

Inventory ...................................................................................................................................................................140,000

Property, plant, and equipment (net of $590,000 accumulated depreciation) .....................................................    862,000

Total assets ...............................................................................................................................................................$1,100,000

Liabilities and Stockholders’ Equity

Accounts payable .....................................................................................................................................................$    162,000

Common stock .........................................................................................................................................................795,000

Retained earnings ....................................................................................................................................................    143,000

Total liabilities and stockholders’ equity .................................................................................................................$1,100,000

Required: Compute the following amounts.

1. The budgeted cash collections for December 20x1.

2. The budgeted income (loss) before income taxes for December 20x1.

3. The projected balance in accounts payable on December 31, 20x1.

Problem 10-9 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3]

Marvel Parts, Inc., manufactures auto accessories. One of the company’s products is a set of seat covers that can be adjusted to fit nearly any small car. The company has a standard cost system in use for all of its products. According to the standards that have been set for the seat covers, the factory should work 1,010 hours each month to produce 2,020 sets of covers. The standard costs associated with this level of production are:

During August, the factory worked only 1,080 direct labor-hours and produced 2,700 sets of covers. The following actual costs were recorded during the month:

At standard, each set of covers should require 2.0 yards of material. All of the materials purchased during the month were used in production.

Required:

1. Compute the materials price and quantity variances for August.

2. Compute the labor rate and efficiency variances for August.

3. Compute the variable overhead rate and efficiency variances for August.

(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Explain three

(3) advantages in using activity based costing system

for a manufacturing

company.

Explain activity-based costing. Choose two (2) manufacturing companies and explain why these companies would benefit from using an activity based costing system.

Please there is nothing to clarify. Just do what is required.
Thanks

Choose at least two concepts from the following: partnership, corporation, liquidation, bankruptcy 7, bankruptcy 11, reorganization, trust, estates, consolidation, parent company, subsidiary, and acquisition.

Required:
Explain how you may use them in your present or future accounting position. Make sure you provide details to include how each concept will help you support the financial goals of the company you currently work for or will work for in the future.