The Zef Radiator Company uses a normal-costing system with a single manufacturing overhead cost pool and machine-hours as the cost-allocation base. The following data are for 2017:
| Budgeted Manufacturing Overhead Costs | $ 4,875,000 |
| Overhead Allocation Base | machine-hours |
| Budgeted machine-hours | 75,000 |
| Manufacturing Overhead Costs Incurred | $ 5,125,000 |
| Actual machine-hours | 80,000 |
Machine-hours data and the ending balances (before proration of under- or overallocated overhead) are as follows:
| Actual Machine-Hours | 2017 End-of-Year Balance | |
| Cost of Goods Sold | 60,000 | $ 8,500,000 |
| Finished Goods Control | 12,000 | 1,000,000 |
| Work-in-Process Control | 8,000 | 500,000 |
Question:
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1. |
Compute the budgeted manufacturing overhead rate for 2017. | |
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2. |
Compute the under- or overallocated manufacturing
overhead of Zef Radiator in 2017. Dispose of this amount using the following: |
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a. |
Write-off to Cost of Goods Sold |
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b. |
Proration based on ending balances (before proration) in Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold |
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c. |
Proration based on the overhead allocated in 2017 (before proration) in the ending balances of Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold | |
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3. |
Which method do you prefer in requirement 2? Explain. |
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In: Accounting
Lamp Light Company maintains and repairs warning lights, such as those found on radio towers and lighthouses. Lamp Light Company prepared the following end-of-period spreadsheet at December 31, 2018, the end of the fiscal year:
| Lamp Light Company | ||||||
| End-of-Period Spreadsheet | ||||||
| For the Year Ended December 31, 2018 | ||||||
| Unadjusted Trial Balance | Adjustments | Adjusted Trial Balance | ||||
| Account Title | Dr. | Cr. | Dr. | Cr. | Dr. | Cr. |
| Cash | 10,800.00 | 10,800.00 | ||||
| Accounts Receivable | 38,900.00 | (a) 11,300.00 | 50,200.00 | |||
| Prepaid Insurance | 4,200.00 | (b) 3,000.00 | 1,200.00 | |||
| Supplies | 2,730.00 | (c) 2,250.00 | 480.00 | |||
| Land | 98,000.00 | 98,000.00 | ||||
| Building | 400,000.00 | 400,000.00 | ||||
| Accumulated Depreciation-Building | 205,300.00 | (d) 10,100.00 | 215,400.00 | |||
| Equipment | 101,000.00 | 101,000.00 | ||||
| Accumulated Depreciation-Equipment | 85,100.00 | (e) 6,680.00 | 91,780.00 | |||
| Accounts Payable | 15,700.00 | 15,700.00 | ||||
| Salaries and Wages Payable | (f) 4,900.00 | 4,900.00 | ||||
| Unearned Rent | 2,100.00 | (g) 1,300.00 | 800.00 | |||
| Common Stock | 75,000.00 | 75,000.00 | ||||
| Retained Earnings | 128,100.00 | 128,100.00 | ||||
| Dividends | 10,000.00 | 10,000.00 | ||||
| Fees Earned | 363,700.00 | (a) 11,300.00 | 375,000.00 | |||
| Rent Revenue | (g) 1,300.00 | 1,300.00 | ||||
| Salaries and Wages Expense | 163,100.00 | (f) 4,900.00 | 168,000.00 | |||
| Advertising Expense | 21,700.00 | 21,700.00 | ||||
| Utilities Expense | 11,400.00 | 11,400.00 | ||||
| Depreciation Expense-Building | (d) 10,100.00 | 10,100.00 | ||||
| Repairs Expense | 8,850.00 | 8,850.00 | ||||
| Depreciation Expense-Equipment | (e) 6,680.00 | 6,680.00 | ||||
| Insurance Expense | (b) 3,000.00 | 3,000.00 | ||||
| Supplies Expense | (c) 2,250.00 | 2,250.00 | ||||
| Miscellaneous Expense | 4,320.00 | 4,320.00 | ||||
| 875,000.00 | 875,000.00 | 39,530.00 | 39,530.00 | 907,980.00 | 907,980.00 | |
Required:
| 1. | Prepare an income statement for the year ended December 31, 2018. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) on the income statement. |
| 2. | Prepare a retained earnings statement for the year ended December 31, 2018. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Refer to the Chart of Accounts for exact wording of account titles. |
| 3. | Prepare a balance sheet as of December 31, 2018. Fixed assets must be entered in order according to account number. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Refer to the Chart of Accounts for exact wording of account titles. For those boxes in which you must enter subtracted or negative numbers use a minus sign. |
| 4. | Based upon the end-of-period spreadsheet, journalize the closing entries. Refer to the Chart of Accounts for exact wording of account titles. |
| 5. | Prepare a post-closing trial balance. |
In: Accounting
On February 1, 2018, Cromley Motor Products issued 6% bonds,
dated February 1, with a face amount of $55 million. The bonds
mature on January 31, 2022 (4 years). The market yield for bonds of
similar risk and maturity was 8%. Interest is paid semiannually on
July 31 and January 31. Barnwell Industries acquired $55,000 of the
bonds as a long-term investment. The fiscal years of both firms end
December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1
and PVAD of $1) (Use appropriate factor(s) from the tables
provided.)
Required:
1. Determine the price of the bonds issued on February 1,
2018.
2-a. Prepare amortization schedules that indicate
Cromley’s effective interest expense for each interest period
during the term to maturity.
2-b. Prepare amortization schedules that indicate
Barnwell’s effective interest revenue for each interest period
during the term to maturity.
3. Prepare the journal entries to record the
issuance of the bonds by Cromley and Barnwell’s investment on
February 1, 2018.
4. Prepare the journal entries by both firms to
record all subsequent events related to the bonds through January
31, 2020.
In: Accounting
Bartolo Delivery has two divisions, air express and ground service, that share the common costs of the company’s communications network, which are $8,000,000 a year. You have the following information about the two divisions and the common communications network:
| Calls (thousands) | Time on Network (hours) | |||||
| Air express | 490,000 | 350,000 | ||||
| Ground service | 210,000 | 1,050,000 | ||||
Required:
a. What is the communications network cost that is charged to each division if the number of calls is used as the allocation basis?
b. What is the communications network cost to each division using time on network as the allocation basis?
In: Accounting
Based on the movie The Accountant, perform an internet search for what they did with Artificial Intelligence.
Required:
Answer the following questions:
In: Accounting
Q3. Explain the importance of observing physical inventory during an audit.
In: Accounting
Calculates the tax benefits of switching the business to a s corporation for each of the stakeholders involved and the business entity
For a s corporation lets say the company Is worth $100 million dollars and $17.5 million in revenue.
Bob owns 50% of the company
Mark owns 20% of the company
Tony owns 25% but his selling his portion of the company
Steve owns 5 %
tax benefits of switching the business to a s corporation?
In: Accounting
Using Activity based costing, why are indirect costs allocated while direct costs are not allocated?
In: Accounting
What is a favorable variance and what is an unfavorable variance? How do you calculate them? Is a favorable variance always a bad thing and is an unfavorable variance always a good thing? Why or why not?
In: Accounting
Fogerty Company makes two products—titanium Hubs and Sprockets. Data regarding the two products follow:
| Direct Labor-Hours per Unit |
Annual Production |
||
| Hubs | 0.80 | 22,000 | units |
| Sprockets | 0.40 | 57,000 | units |
Additional information about the company follows:
Hubs require $35 in direct materials per unit, and Sprockets require $12.
The direct labor wage rate is $15 per hour.
Hubs require special equipment and are more complex to manufacture than Sprockets.
The ABC system has the following activity cost pools:
| Estimated | Activity | ||||
| Activity Cost Pool (Activity Measure) | Overhead Cost | Hubs | Sprockets | Total | |
| Machine setups (number of setups) | $ | 21,600 | 120 | 96 | 216 |
| Special processing (machine-hours) | $ | 253,000 | 4,600 | 0 | 4,600 |
| General factory (organization-sustaining) | $ | 222,800 | NA | NA | NA |
Required:
1. Compute the activity rate for each activity cost pool.
2. Determine the unit product cost of each product according to the ABC system.
he activity rate for each activity cost pool.
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In: Accounting
Gabe and Dana are married and file jointly. For 2019, Gabe earned $150,000 and Dana earned $20,000 working part time as a party planner. They have two young children, a 4-year old son, Mike, and a 6-year old daughter, Chrissy. In order to work, they paid the following for day care to have their children watched and cared for:
|
Best Beginning Day Care |
$4,000 |
|
Bay Child Care & Housekeeping |
2,000 |
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Mrs. Goetz (Dana's mother) |
1,000 |
How much was their child and dependent care tax credit for 2019?
In: Accounting
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87. Eloise is a sales representative for a video production company. While at an exposition, she incurs $2,000 in entertainment expenses and $1,200 for meals. The expenses occur while she is discussing business and Eloise makes an adequate accounting to her employer and is reimbursed $1,200. How much may Eloise deduct if her AGI is $40,000?
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88. Brees Co. requires its employees to adequately account for all reimbursed business expenses. Tracy, an employee of Brees Co. has AGI of $50,000 and submitted for reimbursement the following valid business expenses:
What are the tax consequences if Brees reimburses Tracy $2,400?
The questions are from test bank 2016. With the current tax law, are these answers still correct?? I want to know the updated answers, thanks! |
In: Accounting
Bramble Company uses normal costing in its job-costing system. The company produces custom bikes for toddlers. The beginning balances (December 1) and ending balances (as of December 30) in their inventory accounts are as follows:
| Beginning Balance 12/1 | Ending Balance 12/30 | |
| Material Control | $ 1,800 | $ 8,200 |
| Work-in-process control | 6,400 | 8,700 |
| Manufacturing Department Overhead Control | -- | 92,500 |
| Finished Goods Control | 4,100 | 19,100 |
Additional information follows:
a. Direct materials purchased during December were $66,000.
b. Cost of goods manufactured for December was $231,000.
c. No direct materials were returned to suppliers.
d. No units were started or completed on December 31 and no direct materials were requisitioned on December 31.
e. The manufacturing labor costs for the December 31 working day: direct manufacturing labor, $4,150, and indirect manufacturing labor, $1,250.
f. Manufacturing overhead has been allocated at 150%of direct manufacturing labor costs through December 31.
Question:
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1. |
Prepare journal entries for the December 31 payroll. |
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2. |
Use T-accounts to compute the following: |
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a. |
The total amount of materials requisitioned into work in process during December |
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b. |
The total amount of direct manufacturing labor recorded in work in process during December(Hint: You have to solve requirements 2b and 2c simultaneously) |
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c. |
The total amount of manufacturing overhead recorded in work in process during December |
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d. |
Ending balance in work in process, December 31 |
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e. |
Cost of goods sold for December before adjustments for under- or overallocated manufacturing overhead |
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3. |
Prepare closing journal entries related to manufacturing overhead. Assume that all under- or overallocated manufacturing overhead is closed directly to Cost of Goods Sold. |
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In: Accounting
On January 2, 2018, Athol Company bought a machine for use in operations. The machine has an estimated useful life of eight years and an estimated residual value of $1,750. The company provided the following information:
January 2:
January 15: Paid the balance of the invoice price in cash.
April 16: Paid the note payable and interest in cash.
Required:
1. Compute the acquisition cost of the machine.
2. Prepare the journal entries to record the purchase of the machine and subsequent cash payments on January 15 and April 16, 2018. (Do not round intermediate calculations and round your final answers to the nearest dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
3. Compute the depreciation expense for each of the years 2018, 2019, and 2020, assuming the company’s fiscal year ends on December 31. Use the straight-line depreciation method. (Do not round intermediate calculations and round your final answers to the nearest dollar amount.)
4. Prepare the journal entry to record the sale of the machine on October 1, 2025. (Hint: First determine the balance of the accumulated depreciation account on that date.) (Do not round intermediate calculations and round your final answers to the nearest dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
In: Accounting
Q1. What is the difference between the substantive analytical procedures and the substantive test of details? Explain in detail and provide an example of each one.
In: Accounting