Complete a Horizontal Model

1. Acquired cash of $225,000 from the issue of common stock.

2. Borrowed $175,000 cash from the bank on April 1, 2018.

3. Paid $285,000 cash to purchase fixed assets - land that cost $65,000

   and a building that cost $220,000.

4. Earned and recognized consulting revenue on account for $345,000

5. Collected $200,000 on the accounts receivable during the year

6. Incurred $150,000 of consulting expenses on account during the year.

7. Paid $125,000 on the accounts payable during the year.

8. Paid $92,500 cash for other operating expenses during the year.

9. Paid the company owners $5,300 of dividends.

10. Received $21,750 cash for services to be performed in the future.

11. On June 1, paid $10,500 cash in advance for a one-year lease to rent office space.

12. Paid $9,450 cash for salaries expense.

Information for December 31, 2018

ADJUSTING ENTRIES:

13. Completed $11,350 of services performed described in Transaction 10.

14. Adjust Prepaid Rent account for rent used up during the year. (7

    months)

15. Use the straight-line method to depreciate the building purchased in

    Transaction 3. Management estimated that it had a useful life of 20

    years. Record the building depreciation.

16. Recognized that $3,647 of Salary Expense has been incurred on

    December 31. The employees are owed this for the services they provided in December but will not be paid to them until January. Record the year end accrual for salary expense.

17. Accrued interest expense for loan in # 2. Terms: interest rate 10%, in one year. (Loan was outstanding 9 months during 2018).

CFO of Graham Del plans to have the company issue $500 million of new common stock and use the proceeds to pay off some of its outstanding bonds. Assume that the company, which does not pay any dividends, takes this action, and that total assets, operating income (EBIT), and its tax rate all remain constant. What affect it can have on the company’s financial statements. Discuss.

Bank Reconciliation

The following data were accumulated for use in reconciling the bank account of Creative Design Co. for August 20Y6:

1. Cash balance according to the company's records at August 31, $14,900.
2. Cash balance according to the bank statement at August 31, $15,900.
3. Checks outstanding, $3,020.
4. Deposit in transit, not recorded by bank, $2,430.
5. A check for $270 in payment of an account was erroneously recorded in the check register as $720.
6. Bank debit memo for service charges, $40.

a. Prepare a bank reconciliation, using the format shown in Exhibit 13.

b. If the balance sheet were prepared for Creative Design Co. on August 31, what amount should be reported for cash?
$

c. Must a bank reconciliation always balance (reconcile)?

Entries for Bank Reconciliation

The following data were accumulated for use in reconciling the bank account of Creative Design Co. for August 20Y6:

1. Cash balance according to the company's records at August 31, $22,100.
2. Cash balance according to the bank statement at August 31, $23,310.
3. Checks outstanding, $4,490.
4. Deposit in transit not recorded by bank, $3,600.
5. A check for $480 in payment of an account was erroneously recorded in the check register as $840.
6. Bank debit memo for service charges, $40.

Journalize the entries that should be made by the company that (a) increase cash and (b) decrease cash.

A.

Product Costs using Activity Rates

Atlas Enterprises Inc. manufactures elliptical exercise machines and treadmills. The products are produced in its Fabrication and Assembly production departments. In addition to production activities, several other activities are required to produce the two products. These activities and their associated activity rates are as follows:

The activity-base usage quantities and units produced for each product were as follows:

Use the activity rate and usage information to calculate the total activity cost and activity cost per unit for each product. If required, round the per unit answers to the nearest cent.

B.

High-Low Method for a Service Company

Boston Railroad decided to use the high-low method and operating data from the past six months to estimate the fixed and variable components of transportation costs. The activity base used by Boston Railroad is a measure of railroad operating activity, termed "gross-ton miles," which is the total number of tons multiplied by the miles moved.

Determine the variable cost per gross-ton mile and the total fixed cost.

Pls do not handwritten for easy reading === ===
Question:-
The following are mutually exclusive scenarios.
a) During 20X2 , a Singapore-incorporated company, JK Pte Ltd, discovered that the inventory as stated in the published 20X1 statement of Financial Position was overstated by $150,000. JK Pte Ltd uses a periodic system and the First-In-First-Out cost method. Discuss and determine the accounting treatment of this overstatement in JK Pte Ltd's book based on FRS 8 Accounting Policies, Changes in Accounting Estimates and Errors.
b) The draft financial report of LM Pte Ltd for the year ended 31 Dec 20X1 was completed on 12 Mar 20X2. On 23 Mar 20X2, the board of directors reviews the financial report and authorises it for issue. LM Pte Ltd announces its profit and other selected financial information on 3 Apr 20X2. The shareholders approve the financial report at the annual meeting on 2 Jun 20X2 and the approved financial report is then filed with the regulatory body on 11 Jun 20X2. The objective of FRS 10. Events after the Reporting Period is to prescribe the treatment of events that occur after an entity's reporting period has ended. With reference to the above scenario, explain what are "Events after the reporting period" and how these events should b accounted for.

You have recently been hired as the assistant controller for Stanton Temperton Corporation, which rents building space in major metropolitan areas. Customers are required to pay six months of rent in advance. At the end of 2018, the company's president, Jim Temperton, notices that net income has fallen compared to last year. In 2017, the company reported before-tax profit of $330,000, but in 2018 the before-tax profit is only $280,000. This concerns Jim for two reasons. First, his year-end bonus is tied directly to before-tax profits. Second, shareholders may see a decline in profitability as a weakness in the company and begin to sell their stock. With the sell-off of stock, Jim's personal investment in the company's stock, as well as his company-operated retirement plan, will be in jeopardy of severe losses. After close inspection of the financial statements, Jim notices that the balance of the Deferred Revenue account is $120,000. This amount represents payments in advance from long-term customers ($80,000) and from relatively new customers ($40,000). Jim comes to you, the company's accountant, and suggests that the firm should recognize as revenue in 2018 the $80,000 received in advance from long-term customers. He offers the following explanation: “First, we have received these customers' cash by the end of 2018, so there is no question about their ability to pay. Second, we have a long-term history of fulfilling our obligation to these customers. We have always stood by our commitments to our customers and we always will. We earned that money when we got them to sign the six-month contract.”

Discuss the ethical dilemma you face:

1. What is the issue?

2. Who are the parties affected?

3. What factors should you consider in making your decision?

4. What is the stance you will take?

Required: 1) Reach a consensus concerning the answers to the four questions.

2) Write a memo to the company’s controller discussing the issue and the stance that your group is taking.

[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 $390,000, $410,000, $400,000, and $420,000, 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 30% of the cost of next month’s sales. The cost of goods sold is 60% 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 $54,000. Each month $7,000 of this total amount is depreciation expense and the remaining $47,000 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

Describe in your own words the importance of the financial statement assertions.

FIFO and LIFO

Costs Under Perpetual Inventory System

The following units of an item were available for sale during the year:

Beginning inventory 47 units at $44

Sale 20 units at $68

First purchase 17 units at $47

Sale 33 units at $69

Second purchase 15 units at $48

Sale 7 units at $70

The firm uses the perpetual inventory system, and there are 19 units of the item on hand at the end of the year.

a. What is the total cost of the ending inventory according to FIFO?

b. What is the total cost of the ending inventory according to LIFO?

The following information is presented for the Worldwide Auditor's Association. For the year ended November 30, 2017, the organization had set a membership goal of 100,000 members with the following anticipated results (and actual results for the year-end). Worldwide Auditors' Association Revenues and Expenses For Year Ending November 30, 2017 ($ in thousands) Planned Actual Revenues $55,859.6 $55,054.0 Expenses Salaries 27,900.0 29,000.0 Other personnel costs 6,975.0 6,786.0 Occupancy costs 3,859.6 5,650.0 Reimbursement to local units 1,480.0 1,600.0 Other membership services 1,050.0 1,000.0 Printing and paper 525.0 640.0 Postage and shipping 220.0 242.0 General and administrative 1,090.0 1,076.0 Excess of revenues over expenses $12,760.0 $ 9,060.0 Additional information (PLANNED): • Membership dues were increased from $360 to $400 at the beginning of the year. • One-year subscriptions to Worldwide Auditor were anticipated to be 2,400 units. • Advertising revenue was budgeted at $320,000. Each magazine was budgeted at a cost of $36. • A total of 29,000 technical reports were anticipated at an average price of $80 with average costs of $22. • The budgeted one-day courses had an anticipated attendance of 33,000 with an average fee of $450. The two-day courses had an anticipated attendance of 3,000 with an average fee of $770 per person. • The organization began the year with net capital assets of $88,000,000 with a planned cost of capital of 9 percent. Additional 2017 information (ACTUAL): • Membership dues are $400 per year, of which $100 is considered to cover a one-year subscription to the association’s journal. Other benefits include membership in the association and unit affiliation. • One-year subscriptions to Worldwide Auditor are sold to nonmembers for $160 each. A total of 2,500 of these subscriptions were sold. In addition to subscriptions, the journal generated $400,000 in advertising revenue. The cost per magazine was $40. • A total of 30,000 technical reports were sold by the Books and Reports Department at an average unit selling price of $90. Average costs per publication were $24. • The association offers a variety of continuing education courses to both members and nonmembers. During 2017, the one-day course, which cost participants an average of $500 each, was attended by 31,300 people. A total of 1,985 people took two-day courses at a cost of $800 per person. • General and administrative expenses include all other costs incurred by the corporate staff to operate the association. • The organization has net capital assets of $90,060,000 and had an actual cost of capital of 9 percent. Required a. Prepare a balanced scorecard for IAA for November 2017 with calculated key performance indicators presented in two columns for planned performance and actual performance--include key financial, customer, and operating performance indicators. Include all zeros with figures. For example, 2017 Planned Total Revenues for $55,859.6 (thousand) is entered as $55,859,600 2017 Planned 2017 Actual Financial information Total revenues $Answer 55,859,600 $Answer 55,054,000 Total costs Answer 43,099,600 Answer 45,994,000 Journal advertising Answer 320,000 Answer 400,000 ROI (round to three decimal places) Answer 0.145 Answer 0.101 Residual income Income $Answer 12,760,000 $Answer 9,060,000 Minimum return Answer 7,920,000 Answer 8,105,400 Residual income $Answer 4,840,000 $Answer 954,600 Customer information Course attendance Answer 36,000 Answer 33,285 Technical reports sold Answer 29,000 Answer 30,000 Operating criteria Average cost per special publication $Answer 220 $Answer 242 Average cost per magazine $Answer 36 $Answer 40 Other personnel costs vs. salaries* Answer 0.25 Answer 0.234 *Compute as a ratio. Round three decimal places. b. Which of the evaluation areas you selected indicated success and which indicated failure? Success areas: 1. Answer 2. Answer 3. Answer Failure areas: 1. Answer 2. Answer 3. Answer

The master budget is the company’s plan for achieving their goals. The process has a distinct starting and ending point. In looking at the sales budget, the sales budget dictates what the other areas in the budget should look like. As the head of the sales area, what steps should be taken to ensure the budget is developed in a realistic way?

If bonuses are based on the sales, you as the sales manager want to ensure you and your team will receive the maximum bonus. How would you develop the sales budget? What effect could this have on the other areas of the budget?

discretionary fixed cost

Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost.

Last year, the company sold 44,000 of these balls, with the following results:

Required:

1. Compute (a) last year's CM ratio and the break-even point in balls, and (b) the degree of operating leverage at last year’s sales level.

2. Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break-even point in balls?

3. Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $123,000, as last year?

4. Refer again to the data in (2) above. The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement 1a), what selling price per ball must it charge next year to cover the increased labor costs?

5. Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company’s new CM ratio and new break-even point in balls?

6. Refer to the data in (5) above.

a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $123,000, as last year?

b. Assume the new plant is built and that next year the company manufactures and sells 44,000 balls (the same number as sold last year). Prepare a contribution format income statement and Compute the degree of operating leverage.

Kitchenware, Inc., sells two types of water pitchers, plastic and glass. Plastic pitchers cost the company $15 and are sold for $30. Glass pitchers cost $24 and are sold for $45. All other costs are fixed at $982,800 per year. Current sales plans call for 14,000 plastic pitchers and 42,000 glass pitchers to be sold in the coming year.

a. How many pitchers of each type must be sold to break even in the coming year?

b. Kitchenware, Inc., has just received a sales catalog from a new supplier that is offering plastic pitchers for $13. What would be the new breakeven point if managers switched to the new supplier?

Suppose a company can replace the packing material it currently uses with a biodegradable packing material. The company believes this move to biodegradable packing materials will be well-received by the general public. However, the biodegradable packing materials are more expensive than the current packing materials and the contribution margin ratios of the related products will drop. What are the arguments for the company to use the biodegradable packing materials? What are the arguments for the company to not use the biodegradable materials?