Classifying Cash Flows
The company provided the following information.
(a)   Cash sales for the year were $50,000; sales on account totaled $60,000. (b) Cost of goods sold was $55,000. (c)   All inventory is purchased on account. (d) Depreciation on building was $31,000 for the year.
(e)   Depreciation on equipment was $2,000.
(f)   Cash collections of accounts receivable were $38,000.
(g) Cash payments on accounts payable for inventory equaled $39,000.
(h)   Rent expense paid in cash was $11,000.
(i)   20,000 shares of common stock were issued for $240,000 in cash.
(j)   Land valued at $106,000 was acquired in exchange for signing a mortgage note payable.
(k)   Equipment was purchased for cash at a cost of $84,000.
(l)   Dividends of $46,000 were declared but not yet paid.
(m) $15,000 of dividends that had been declared the previous year were paid in cash.
(n)   Interest totaling $16,000 was paid in cash during the year.
(o)   A machine used on the assembly line was sold for $12,000 in cash. The machine had a book value of $7,000.
(p) On January 1, the company entered into an operating lease to secure the use of a building having a cash price of $200,000. The first lease payment of $19,000 in cash was made on January 1.
1.   Compute cash from operating activities. 2.   Compute cash from investing activities. 3.   Compute cash from financing activities

describe how concept of management is preceived in entrepreneurship

Jensen and Stafford began a partnership to start a hardwood flooring installation business, by investing $179,000 and $219,000, respectively. They agreed to share profits/(losses) by providing yearly salary allowances of $169,000 to Jensen and $94,000 to Stafford, 15% interest allowances on their investments, and sharing the balance 3:2.

Required:
1. Determine each partner’s share if the first-year profit was $439,000.

2. Independent of (1), determine each partner’s share if the first-year loss was $114,000. (Negative answers should be indicated by a minus sign.)

The City of Imperial Falls contracts with Evergreen Waste Collection to provide solid waste collection to households and businesses. Until recently, Evergreen had an exclusive franchise to provide this service in Imperial Falls, which meant that other waste collection firms could not operate legally in the city. The price per pound of waste collected was regulated at 20 percent above the average total cost of collection.

Cost data for the most recent year of operations for Evergreen are as follows.

Data on customers for the most recent year are as follows.

The City Council of Imperial Falls is considering allowing other private waste haulers to collect waste from businesses, but not from households. Service to businesses from other waste collection firms would not be subject to price regulation. Based on information from neighboring cities, the price that other private waste collection firms will charge is estimated to be $0.04 per pound (= $80 per ton). (1 ton = 2,000 pounds)

Evergreen's CEO has approached the city council with a proposal to change the way costs are allocated to households and businesses, which will result in different rates for households and businesses. She proposes that administrative costs and truck operating costs be allocated based on the number of customers and the other collection costs be allocated based on pounds collected. The total costs allocated to households would then be divided by the estimated number of pounds collected from households to determine the cost of collection. The rate would then be 20 percent above the cost. The rate for businesses would be determined using the same calculation.

Required:

a. Based on cost data from the most recent year, what is the price per pound charged by Evergreen for waste collection under the current system (the same rate for both types of customers)?

b. Based on cost and waste data from the most recent year, what would be the price per pound charged to households and to businesses by Evergreen for waste collection if the CEO’s proposal were accepted?

Product costs are all the expenses related to producing or acquiring products. Period costs are all other expenses. Period costs are tracked during the period in which they occur and products costs are moved to the expense account for costs of goods sold so when the good they are associated with is sold to make matching those expenses with the sales revenue easy. For example the wages for sales staff who sell a books would be a period cost and be recorded as an expense for the period in which they work. Whereas, if you buy books one year, but don't sell them until the next they wouldn't be recorded in the expense account as cost of goods sold until the following year when they are actually sold and are a product cost.

The difference between a product cost and a period cost. A product cost are those costs that are directly associated with the production or acquisition of a good or product. For example, if a Mike's camera store owner bought cameras and paid the shipping to get them to the store the cost of the camera as well as the cost of the shipping would be considered product costs. A period cost is a little more abstract. A period cost would be all of the other expenses. For example the cost of marketing, advertising and administrative would be considered a period cost.

Respond to the above paragraphs in 2 separate paragraphs in your view or opinion.

make a trail balance out of the transactions provided

On August 2, Paid $2200 cash for August salon rent. On August 4, Incurred $400 of advertising costs due in 20 days On August 5, Purchased salon equipment for $120 On August 7, Paid for supplies (shampoos, creams, and gels) $350 On August 8, received $300 for selling gels On August 12, paid $200 water bill On August 12, paid $150 for electricity bill On August 14, incurred $1100 for the business’s bank loan due in 14 days On August 16, purchased a new chair set up for $450 On August 17, paid the amount due for the influencer $400 for advertising On August 19, paid $90 for my internet bill On August 21, received for $200 selling of shampoos On August 23, paid $110 for insurance On August 24, cleaner $110 On August 27, paid $1100 for the business’s bank loan On August 28, gas bills $35 On August 30, extra salary cost to a new trainee $400 On August 30, purchased a new tv screen $600 On August 30, paid $6000 in salaries for the month of August. On August 30, received $14000 from haircuts services during the month of August. And $500 of selling gels, creams, and shampoos

  
On July 1, 2018, Tony and Suzie organize their new company as a corporation, Great Adventures Inc. The following transactions occur from August 1 through December 31. Also, the balances are provided for the month ended July 31.
  
The articles of incorporation state that the corporation will sell 27,000 shares of common stock for $1 each. Each share of stock represents a unit of ownership. Tony and Suzie will act as co-presidents of the company. The following business activities occur during July for Great Adventures.
  
Jul. 1 Sell $13,500 of common stock to Suzie.
Jul. 1 Sell $13,500 of common stock to Tony.
Jul. 1 Purchase a one-year insurance policy for $5,760 ($480 per month) to cover injuries to participants during outdoor clinics.
Jul. 2 Pay legal fees of $2,000 associated with incorporation.
Jul. 4 Purchase office supplies of $1,500 on account.
Jul. 7 Pay for advertising of $280 to a local newspaper for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged $40 the day of the clinic.
Jul. 8 Purchase 10 mountain bikes, paying $18,900 cash.
Jul. 15 On the day of the clinic, Great Adventures receives cash of $2,400 from 60 bikers. Tony conducts the mountain biking clinic.
Jul. 22 Because of the success of the first mountain biking clinic, Tony holds another mountain biking clinic and the company receives $2,950.
Jul. 24 Pay for advertising of $710 to a local radio station for a kayaking clinic to be held on August 10. Attendees can pay $100 in advance or $150 on the day of the clinic.
Jul. 30 Great Adventures receives cash of $4,000 in advance from 40 kayakers for the upcoming kayak clinic.
Aug. 1 Great Adventures obtains a $41,000 low-interest loan for the company from the city council, which has recently passed an initiative encouraging business development related to outdoor activities. The loan is due in three years, and 6% annual interest is due each year on July 31.
Aug. 4 The company purchases 14 kayaks, paying $19,500 cash.
Aug. 10 Twenty additional kayakers pay $3,000 ($150 each), in addition to the $4,000 that was paid in advance on July 30, on the day of the clinic. Tony conducts the first kayak clinic.
Aug. 17 Tony conducts a second kayak clinic, and the company receives $12,500 cash.
Aug. 24 Office supplies of $1,500 purchased on July 4 are paid in full.
Sep. 1 To provide better storage of mountain bikes and kayaks when not in use, the company rents a storage shed, purchasing a one-year rental policy for $3,000 ($250 per month).
Sep. 21 Tony conducts a rock-climbing clinic. The company receives $14,900 cash.
Oct. 17 Tony conducts an orienteering clinic. Participants practice how to understand a topographical map, read an altimeter, use a compass, and orient through heavily wooded areas. The company receives $19,800 cash.
Dec. 1 Tony decides to hold the company’s first adventure race on December 15. Four-person teams will race from checkpoint to checkpoint using a combination of mountain biking, kayaking, orienteering, trail running, and rock-climbing skills. The first team in each category to complete all checkpoints in order wins. The entry fee for each team is $570.Dec. 5 To help organize and promote the race, Tony hires his college roommate, Victor. Victor will be paid $30 in salary for each team that competes in the race. His salary will be paid after the race.Dec. 8 The company pays $1,900 to purchase a permit from a state park where the race will be held. The amount is recorded as a miscellaneous expense.Dec. 12 The company purchases racing supplies for $2,700 on account due in 30 days. Supplies include trophies for the top-finishing teams in each category, promotional shirts, snack foods and drinks for participants, and field markers to prepare the racecourse.Dec. 15 The company receives $22,800 cash from a total of forty teams, and the race is held.Dec. 16 The company pays Victor’s salary of $1,200.
Dec. 31 The company pays a dividend of $3,400 ($1,700 to Tony and $1,700 to Suzie).
Dec. 31 Using his personal money, Tony purchases a diamond ring for $4,600. Tony surprises Suzie by proposing that they get married. Suzie accepts and they get married!

The following information relates to year-end adjusting entries as of December 31, 2018.
  
a. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $7,900.
b. Six months’ worth of insurance has expired.
c. Four months’ worth of rent has expired.
d. Of the $1,500 of office supplies purchased on July 4, $390 remains.
e. Interest expense on the $41,000 loan obtained from the city council on August 1 should be recorded.
f. Of the $2,700 of racing supplies purchased on December 12, $130 remains.
g. Suzie calculates that the company owes $13,100 in income taxes.
  
Assume the following ending balances for the month of July.

1. Prepare an adjusted trial balance as of December 31, 2018.

2. For the period July 1 to December 31, 2018, prepare an income statement.

3. For the period July 1 to December 31, 2018, prepare a statement of stockholders’ equity. All account balances on July 1 were zero.

4. Prepare a classified balance sheet as of December 31, 2018. (Amounts to be deducted should be indicated with a minus sign.)

Describe the journal entry for a stock dividend on common stock (which has a par value). Be sure to address the difference between a small and large stock dividend with regard to amounts used to adjust retained earnings. Since you are describing the journal entry, remember to address what accounts are used and any corresponding debits and credits.

explain any five functional areas of planning and staffing related to entrepreneurship.

Enterprise Risk Management (ERM) is directly related to auditing. Describe the relationship between ERM and auditing. Why is ERM important to an organization?  

The following balances were taken from the books of Alonzo Corp. on December 31, 2017. Interest revenue $86,000 Accumulated depreciation—equipment $40,000 Cash 51,000 Accumulated depreciation—buildings 28,000 Sales revenue 1,380,000 Notes receivable 155,000 Accounts receivable 150,000 Selling expenses 194,000 Prepaid insurance 20,000 Accounts payable 170,000 Sales returns and allowances 150,000 Bonds payable 100,000 Allowance for doubtful accounts 7,000 Administrative and general expenses 97,000 Sales discounts 45,000 Accrued liabilities 32,000 Land 100,000 Interest expense 60,000 Equipment 200,000 Notes payable 100,000 Buildings 140,000 Loss from earthquake damage 150,000 Cost of goods sold 621,000 Common stock 500,000 Retained earnings 21,000 Assume the total effective tax rate on all items is 34%. Prepare a multiple-step income statement; 100,000 shares of common stock were outstanding during the year. (Round earnings per share to 2 decimal places, e.g. 1.48.)

Spicewood Stables Inc. was established in Austin, Texas, on April 1, 2019. The company provides stables, care for animals and grounds for riding and showing horses. The following transactions are provided for your review:

1. Received contributions from five investors of $50,000 in cash ($10,000 each), building (valued at $100,000), land (valued at $60,000) and supplies (valued at $2,000). Issued stock (without paid-in capital).
2. Built a small barn for $42,000. The company paid half the amount in cash on April 1, 2019 and signed a three-year note payable for the balance.
3. Provided $15,260 in animal care services for customers, all on credit.
4. Rented stables to customers for April, received cash of $13,200.
5. Received from a customer $1,500 in cash to board her horse in May, June and July.
6. Purchased supplies on account for $3,210 to be used in the summer.
7. Paid $840 in cash for water utilities incurred in the month.
8. Paid $1,700 in accounts payable for previous purchases.
1. Received $1,000 in cash from customers on accounts receivable.
10. Paid $4,000 in cash for wages to employees who worked during the month.
11. At the end of the month, purchased a two-year insurance policy for $3,600 cash.
50. Received an electric utility bill for $1,200 for usage in April; the bill will be paid next month.
1000. Declared and paid $100 cash dividend to each of the five investors at the end of the month.

• Record in the T-accounts the effects of each transaction for Spicewood Stables in April 2019, referring each transaction in the accounts with the transaction letter. Compute and show the unadjusted ending balances in the T-accounts.

Read the scenario below and answer the questions that follow in your role as a member of the senior management team at Oakwood. You are reviewing budgets and actual results for the month of April for the various business activities and today, you are focusing on Golf Cart Rentals. In the recent past, there has been some tension between the management of Golf Cart Rentals and Golf Course Operations, so some information about Golf Course Operations is included below.

About Oakwood

Oakwood is a resort hotel with tennis courts, swimming pools, three golf courses, restaurants, and many other fine amenities. The resort’s management structure is highly decentralized because each business activity is quite different and requires a different set of managerial skills, experience, and staffing. For example, being a good hotel dining room manager requires a completely different set of skills and experiences than being a good golf course pro shop manager. Oakwood believes that the decentralized structure is a key success factor in its strategy and tries to operate every one of its business activities as a profit center unless the activity does not have a measurable revenue stream. Those activities are managed as cost centers. Two of the most important activities in Golf Division are Golf Course Operations and Golf Cart Rentals. Each of these activities are managed as profit centers because each has an identifiable revenue stream and each requires a specific set of managerial skills to be successful.

Golf Cart Rentals

Oakwood customers who wish to play golf may either rent a cart or walk the course. They only pay a cart rental fee if they rent a cart. The Golf Cart Rentals profit center’s revenue each month is the total of the cart rental fees. Jay MacDonald (“Mac”) is the manager of the Golf Cart Rentals profit center and he supervises all business activities related to rentals of motorized golf carts at Oakwood. The carts are leased from various vendors and Mac negotiates these leases. Most vendors like to lease for two or three years, but one of Mac’s valuable skills is his ability to make good deals with golf cart suppliers. His crafty negotiations have given Oakwood a portfolio of lease rental terms ranging from three months to three years at very good rates.

Mac manages the golf cart maintenance crew that keeps the 200-cart fleet clean, properly fueled with oil and gas, and that makes minor repairs on the carts. The carts are solidly built and rarely need major repairs as long as they are properly maintained, and Mac does a good job of hiring and keeping skilled mechanics who excel at maintenance and minor repairs. He always says that paying a little more is worth it to get hard-working, competent workers, and the golf cart maintenance crew does have a higher average pay rate than most of the other Golf Division employees. As a result of this excellent maintenance program, the few carts that do need major repairs are usually old and about to go off-lease anyway. So, instead of repairing them, Mac just takes them out of service and replaces them in the next round of leasing. The accounting department records the salaries and related costs (payroll taxes and benefits) in the Labor account.

Two years ago, Mac installed large underground tanks (one for gas and one for oil) so Oakwood could buy in bulk and get quantity discounts. This has worked out well and has reduced oil and gas costs so much that the cost of the tanks and installation will be recaptured at the end of this year. The distributor’s tanker trucks, one for oil and one for gas, stop by every three or four weeks to refill the tanks. The accounting department records these costs in the Gas and oil expense account when they get the invoice for each delivery, usually a few days after the delivery.

Golf Course Operations

Sandra Bunker (“Sandy”) is the manager of Golf Course Operations. A major part of her job is supervising golf course maintenance and repair. A resort golf course must be in excellent condition to draw resort guests and others to the course. Thus, the condition of the course is an important part of the entire resort’s reputation. Oakwood has had several marketing research studies done over the years and all of them confirm that when a resort’s golf course falls into poor condition, everything from dining room revenue to room rental revenue suffers.

Golf Course Operations is a profit center and its revenue is the total of greens fees collected from resort guests and others to play on the golf courses. Costs charged to Golf Course Operations include grounds crew salaries and benefits, the cost of outsourced services such as planting and trimming the trees and bushes that line the fairways, and the cost of supplies such as fertilizer, grass seed, bedding flowers, sand, and various kinds of mulch. The grounds crew workers are mostly unskilled laborers who are generally paid just a little more than the minimum wage.

Weather conditions are an important factor in the overall profitability of any golf course. Rainy or cold weather will reduce the number of golfers who play the course, but even more important is that the condition of the course can be affected by how it is used when it has become wet. If rain continues for several days or the rain amounts are unusually high, the course can become waterlogged. Operating golf carts on a waterlogged course can do serious and permanent damage to the turf. To prevent permanent turf damage, Sandy can choose to close the course to golf carts entirely, or she can have the grounds crew restrict golf cart use by placing rope fences around the wet areas. A course that is closed to carts can still generate greens fees paid by golfers who are willing to walk the course. On rare occasions, the course will become so wet that Sandy will close the course to all golfers. Sandy determines whether each course will be open or closed due to weather conditions on any particular day. She also determines whether players can use golf carts. As you might imagine, Sandy does hear from Mac on days when she prohibits golf carts, but Sandy does have the final say in that decision since the condition of the golf courses is, ultimately, her responsibility. Sandy is on the courses each morning at dawn supervising the maintenance crews, so she is in a good position to decide whether to rope off just the wettest parts of the course and allow carts, prohibit carts, or close the course entirely.

A Rainy April at Oakwood

This April, golf cart operating profits were extremely low, amounting to a mere 49% of budgeted profits. When you discussed this matter with Mac, he explained that the poor results were caused by the unusually heavy rains in April. He complained that Sandy had closed entire courses to carts on several days when only parts of the courses were too wet to tolerate the carts safely. He argued that, on those days, guests could play the courses (and generate revenue for Sandy), but they could not drive carts, which shut his revenue off completely. Note: Guests are not permitted to drive carts in roped off areas of a golf course; but they can rent carts and drive them elsewhere on the course. If an entire course is roped off, guests cannot rent carts at all when playing that course on that day.

Mac said he had overheard Sandy’s grounds crew members talking among themselves on the days that entire courses were closed to carts. He had heard the crew members saying that they were too busy to rope off just the wet areas and that they had gone ahead and closed entire courses to cart traffic instead because it was easier to do that than to spend time roping off the wet areas. You could see that Mac was not happy about this. In your conversation with Mac, for example, he compared the grounds crew unfavorably to his golf cart maintenance crew, noting that his crew were all hard working employees and not “lazy” like the grounds crew.

When you met with both Mac and Sandy, you learned that they communicate regularly and often share the same opinions about the operation of Oakwood as a whole. Your impression is that they generally work together in a positive and cooperative manner to resolve issues that arise. But you do see that the decisions Sandy makes about roping off the courses (or parts of the courses) are a consistent source of concern for Mac.

The resort’s controller, Ampzilla Forkwort, developed a flexible budget analysis for April that she says will help you better analyze Mac’s results. Her analysis for the month appears below (F indicates a favorable variance, U indicates an unfavorable variance):

Requirements:

Your solution should be written in single-spaced text, included in one Microsoft Word or RTF document, and should address specifically the following four questions (you do not need to reprint the questions in your solution, but do number your answers):

1. Most accountants would argue that a flexible budget is good to use when calculating variances on variable costs (such as gas and oil). In 100 words or less, using the knowledge about accounting you have gained in this course and the facts presented in the case narrative, identify and describe the most likely cause of the $900 unfavorable variance on gas and oil expense and explain the basis for your belief.

2. Categorize Mac’s performance for April using this rating scheme: “Really Great,” “Pretty Much OK,” or “Really Awful.” In 100-200 words, explain why you ranked him as you did.

3. Assume you decide to start measuring Mac’s performance using the flexible budget (experienced businesspersons with MBAs would call that “flexing out the volume effect”). In 100-200 words, describe the most likely effects (intended and unintended) of using this measure on the quality of the cart rental fleet and the profitability of the cart rental operation in the future. In your answer, describe any assumptions you make and be sure to state clear, logical arguments that lead to your conclusions.

4. A conflict between the interests of Mac and Sandy might exist in this situation. One might argue that having each of these managers achieve their goals separately might not lead to the best results for Oakwood as a whole. In 100-200 words, describe any conflict that exists here and suggest possible solutions that would better align the goals of these managers with the overall goals of Oakwood. Remember that Sandy and Mac communicate regularly and work out most issues in a friendly way, (other than the issue of closing courses to carts because of weather-related conditions) so suggesting they communicate better is not going to be a solution here. Also, remember that Oakwood has a strong policy of decentralization and that Mac and Sandy each have valuable knowledge about their specific operations that Oakwood wants to make sure they use effectively in managing their respective operations.