Pottle Ice Cream uses a mixing department and a freezing department to produce its ice cream. Its process costing system in the mixing department has two direct materials cost categories (ice cream mix and flavourings) and one conversion cost pool.
The following data pertain to the mixing department for April 2018:
Work-in-process, 1 April 0
Started in April 10 000 litres
Completed and transferred to freezing 8 500 litres
Costs:
Ice cream mix $27 000
Flavourings $4 080
Conversion costs $53 700
The ice cream mix is introduced at the start of operations in the mixing department, and the flavourings are added when the product is 40% completed in the mixing department. Conversion costs are added evenly during the process. The ending work-in-process in the mixing department is 30% complete.
Required
In: Accounting
On April 1, 2017, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company’s first month.
| April | 1 | Nozomi invested $41,000 cash and computer equipment worth $30,000 in the company in exchange for common stock. | ||
| 2 | The company rented furnished office space by paying $2,700 cash for the first month’s (April) rent. | |||
| 3 | The company purchased $1,400 of office supplies for cash. | |||
| 10 | The company paid $2,800 cash for the premium on a 12-month insurance policy. Coverage begins on April 11. | |||
| 14 | The company paid $900 cash for two weeks' salaries earned by employees. | |||
| 24 | The company collected $22,500 cash on commissions from airlines on tickets obtained for customers. | |||
| 28 | The company paid $900 cash for two weeks' salaries earned by employees. | |||
| 29 | The company paid $400 cash for minor repairs to the company's computer. | |||
| 30 | The company paid $1,400 cash for this month's telephone bill. | |||
| 30 | The company paid $2,500 cash in dividends. |
The company's chart of accounts follows:
| 101 | Cash | 405 | Commissions Earned |
| 106 | Accounts Receivable | 612 | Depreciation Expense—Computer Equip. |
| 124 | Office Supplies | 622 | Salaries Expense |
| 128 | Prepaid Insurance | 637 | Insurance Expense |
| 167 | Computer Equipment | 640 | Rent Expense |
| 168 | Accumulated Depreciation—Computer Equip. | 650 | Office Supplies Expense |
| 209 | Salaries Payable | 684 | Repairs Expense |
| 307 | Common Stock | 688 | Telephone Expense |
| 318 | Retained Earnings | 901 | Income Summary |
| 319 | Dividends | ||
Use the following information:
Required:
1. & 2. Prepare journal
entries to record the transactions for April and post them to the
ledger accounts in Requirement 6b. The company records prepaid and
unearned items in balance sheet accounts.
3. Using account balances from Requirement 6b,
prepare an unadjusted trial balance as of April 30.
4. Journalize and post the adjusting entries for
the month and prepare the adjusted trial balance.
5a. Prepare the income statement for the month of
April 30, 2017.
5b. Prepare the statement of retained earnings for
the month of April 30, 2017.
5c. Prepare the balance sheet at April 30,
2017.
6a. Prepare journal entries to close the temporary
accounts and then post to Requirement 6b.
6b. Post the journal entries to the ledger.
7. Prepare a post-closing trial balance.
In: Accounting
On January 1, 2016 ABC purchases equipment for $100,000. It uses the DB method for depreciation. It has a salvage value of $20,000. It has an estimated life of 8 years. On 5/1/2018, ABC sold the asset for $65,000. Record the JEs on 5/1/18.
In: Accounting
1. Which of the following is nott one of the rights provided to taxpayers under The Taxpayer Bill of Rights?
A.. The right to know what they need to do to comply with the tax laws.
B.. The right to receive prompt, courteous, and professional assistance in their dealings with the
IRS.
C.. The right to know the maximum amount of time they have to challenge the IRS's position.
D.. The right to reschedule the audit as many times as the taxpayer or their representative deems
necessary.
2. Which of the following is nott true regarding audits?
A.. The IRS audits tax returns to determine if taxpayers have voluntarily complied with the tax
laws.
B.. The IRS audits tax returns to motivate taxpayers to voluntarily comply with the tax laws.
C.. Audits are designed to discourage taxpayers from claiming tax credits for which they are
qualified.
D.. Audits are a process by which the IRS verifies the accuracy of information on a taxpayer's
return.
In: Accounting
The following cost data for the year just ended pertain to Sentiments, Inc., a greeting card manufacturer:
| Direct material | $ | 2,200,000 | |
| Advertising expense | 98,000 | ||
| Depreciation on factory building | 115,000 | ||
| Direct labor: wages | 535,000 | ||
| Cost of finished goods inventory at year-end | 115,000 | ||
| Indirect labor: wages | 142,000 | ||
| Production supervisor’s salary | 47,000 | ||
| Service department costs* | 100,000 | ||
| Direct labor: fringe benefits | 99,000 | ||
| Indirect labor: fringe benefits | 30,000 | ||
| Fringe benefits for production supervisor | 11,000 | ||
| Total overtime premiums paid | 55,000 | ||
| Cost of idle time: production employees§ | 40,000 | ||
| Administrative costs | 150,000 | ||
| Rental of office space for sales personnel† | 15,000 | ||
| Sales commissions | 6,000 | ||
| Product promotion costs | 10,000 | ||
*All services are provided to manufacturing departments.
§Cost of idle time is an overhead item; it is not included in the direct-labor wages given above.
The rental of sales space was made necessary when the sales offices were converted to storage space for raw material.
Compute each of the following costs for the year just ended
a.Total prime cost
Total manufacturing overhead costs
Total conversion costs
Total product costs
Total period costs
In: Accounting
In a one- to two-page essay, consider the function of managerial accounting within a firm. Describe the purpose and scope of managerial accounting. Within the analysis explain how managers use the internal financial data to better manage the daily operations of a company.
In: Accounting
19.
Rodgers and Winter had capital balances of $60,000 and $90,000, respectively, at the beginning of the current fiscal year. The articles of partnership provide for salary allowances of $25,000 and $30,000, respectively; an allowance of interest at 12% on the capital balances at the beginning of the year; and the remaining net income divided equally. Net income for the current year was $110,000.
a. Present the Division of net income section of the income statement for the current year.
| Net income | $110,000 | |||||||
| Rodgers | Winter | Total | ||||||
| Division of net income: | ||||||||
| Salary allowance | $ | $ | $ | |||||
| Interest allowance | ||||||||
| Total | ||||||||
| Net income | $ | $ | $ | |||||
b. Assuming that the net income had been $65,000 instead of $110,000, present the Division of net income section of the income statement for the current year.
| Net income | $65,000 | |||||||
| Rodgers | Winter | Total | ||||||
| Division of net income: | ||||||||
| Salary allowance | $ | $ | $ | |||||
| Interest allowance | ||||||||
| Total | ||||||||
| Net income | $ | $ | $ | |||||
In: Accounting
Exercise 2-15 Plantwide and Departmental Predetermined Overhead Rates; Job Costs [LO2-1, LO2-2, LO2-3, LO2-4]
[The following
information applies to the questions displayed
below.]
Delph Company uses a job-order costing system and has two manufacturing departments—Molding and Fabrication. The company provided the following estimates at the beginning of the year:
| Molding | Fabrication | Total | |||||
| Machine-hours | 31,000 | 41,000 | 72,000 | ||||
| Fixed manufacturing overhead costs | $ | 740,000 | $ | 210,000 | $ | 950,000 | |
| Variable manufacturing overhead cost per machine-hour | $ | 5.50 | $ | 5.50 | |||
During the year, the company had no beginning or ending inventories and it started, completed, and sold only two jobs—Job D-70 and Job C-200. It provided the following information related to those two jobs:
| Job D-70: | Molding | Fabrication | Total | |||
| Direct materials cost | $ | 378,000 | $ | 322,000 | $ | 700,000 |
| Direct labor cost | $ | 230,000 | $ | 160,000 | $ | 390,000 |
| Machine-hours | 24,000 | 7,000 | 31,000 | |||
| Job C-200: | Molding | Fabrication | Total | |||
| Direct materials cost | $ | 290,000 | $ | 230,000 | $ | 520,000 |
| Direct labor cost | $ | 160,000 | $ | 270,000 | $ | 430,000 |
| Machine-hours | 7,000 | 34,000 | 41,000 | |||
Delph had no underapplied or overapplied manufacturing overhead during the year.
Exercise 2-15 Part 1
Required:
1. Assume Delph uses a plantwide predetermined overhead rate based on machine-hours.
c. If Delph establishes bid prices that are 140% of total manufacturing cost, what bid prices would it have established for Job D-70 and Job C-200?
d. What is Delph’s cost of goods sold for the year?
In: Accounting
[The following information applies to the questions
displayed below.]
|
Near the end of 2011, the management of Simid Sports Co., a merchandising company, prepared the following estimated statement of financial position for December 31, 2011. |
| SIMID SPORTS COMPANY Estimated Statement of Financial position December 31, 2011 |
|||||
| Assets | |||||
| Cash | $ | 35,500 | |||
| Accounts receivable | 520,000 | ||||
| Inventory | 150,000 | ||||
| Total current assets | 705,500 | ||||
| Equipment | $ | 544,000 | |||
| Less accumulated depreciation | 68,000 | 476,000 | |||
| Total assets | $ | 1,181,500 | |||
| Liabilities and Equity | |||||
| Accounts payable | $ | 360,000 | |||
| Bank loan payable | 15,000 | ||||
| Tax payable (due 3/15/2012) | 92,000 | ||||
| Total liabilities | $ | 467,000 | |||
| Share capital—ordinary | 473,500 | ||||
| Retained earnings | 241,000 | ||||
| Total stockholders’ equity | 714,500 | ||||
| Total liabilities and equity | $ | 1,181,500 | |||
|
To prepare a master budget for January, February, and March of 2012, management gathers the following information. |
| a. |
Simid Sports’ single product is purchased for $30 per unit and resold for $57 per unit. The expected inventory level of 5,000 units on December 31, 2011, is more than management’s desired level for 2012, which is 20% of the next month’s expected sales (in units). Expected sales are: January, 7,250 units; February, 8,750 units; March, 10,500 units; and April, 11,000 units. |
| b. |
Cash sales and credit sales represent 25% and 75%, respectively, of total sales. Of the credit sales, 57% is collected in the first month after the month of sale and 43% in the second month after the month of sale. For the December 31, 2011, accounts receivable balance, $130,000 is collected in January and the remaining $390,000 is collected in February. |
| c. |
Merchandise purchases are paid for as follows: 20% in the first month after the month of purchase and 80% in the second month after the month of purchase. For the December 31, 2011, accounts payable balance, $80,000 is paid in January and the remaining $280,000 is paid in February. |
| d. |
Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are $66,000 per year. |
| e. |
General and administrative salaries are $144,000 per year. Maintenance expense equals $2,000 per month and is paid in cash. |
| f. |
Equipment reported in the December 31, 2011, statement of financial position was purchased in January 2011. It is being depreciated over eight years under the straight-line method with no residual value. The following amounts for new equipment purchases are planned in the coming quarter: January, $35,000; February, $96,000; and March, $29,500. This equipment will be depreciated under the straight-line method over eight years with no residual value. A full month’s depreciation is taken for the month in which equipment is purchased. |
| g. |
The company plans to acquire land at the end of March at a cost of $150,000, which will be paid with cash on the last day of the month. |
| h. |
Simid Sports has a working arrangement with its bank to obtain additional loans as needed. The interest rate is 12% per year, and interest is paid at each month-end based on the beginning balance. Partial or full payments on these loans can be made on the last day of the month. The company has agreed to maintain a minimum ending cash balance of $36,513 in each month. |
| i. |
The income tax rate for the company is 43%. Income tax on the first quarter’s income will not be paid until April 15. |
| Required: |
|
Prepare a master budget for each of the first three months of 2012; include the following component budgets: |
| 1. |
Monthly sales budgets. (Omit the "$" sign in your response.) |
| 2. |
Monthly merchandise purchases budgets. (Units to be deducted should be indicated with a minus sign. Omit the "$" & "%" signs in your response.) |
| 3. | Monthly selling expense budgets. (Omit the "$" & "%" signs in your response.) |
| 4. |
Monthly general and administrative expense budgets. (Do not round your intermediate calculations. Round your final answers to the nearest whole dollar. Omit the "$" sign in your response.) |
| 5. | Monthly capital expenditures budgets. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values. Omit the "$" sign in your response.) |
| 6. |
Monthly cash budgets. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values except negative preliminary cash balance and repayment of loan to bank which should be indicated by a minus sign. Round your intermediate calculations and final answers to the nearest dollar amount. Omit the "$" sign in your response.) |
In: Accounting
Exercise 2-15 Plantwide and Departmental Predetermined Overhead Rates; Job Costs [LO2-1, LO2-2, LO2-3, LO2-4]
[The following
information applies to the questions displayed
below.]
Delph Company uses a job-order costing system and has two manufacturing departments—Molding and Fabrication. The company provided the following estimates at the beginning of the year:
| Molding | Fabrication | Total | |||||
| Machine-hours | 31,000 | 41,000 | 72,000 | ||||
| Fixed manufacturing overhead costs | $ | 740,000 | $ | 210,000 | $ | 950,000 | |
| Variable manufacturing overhead cost per machine-hour | $ | 5.50 | $ | 5.50 | |||
During the year, the company had no beginning or ending inventories and it started, completed, and sold only two jobs—Job D-70 and Job C-200. It provided the following information related to those two jobs:
| Job D-70: | Molding | Fabrication | Total | |||
| Direct materials cost | $ | 378,000 | $ | 322,000 | $ | 700,000 |
| Direct labor cost | $ | 230,000 | $ | 160,000 | $ | 390,000 |
| Machine-hours | 24,000 | 7,000 | 31,000 | |||
| Job C-200: | Molding | Fabrication | Total | |||
| Direct materials cost | $ | 290,000 | $ | 230,000 | $ | 520,000 |
| Direct labor cost | $ | 160,000 | $ | 270,000 | $ | 430,000 |
| Machine-hours | 7,000 | 34,000 | 41,000 | |||
Delph had no underapplied or overapplied manufacturing overhead during the year.
Exercise 2-15 Part 2
2. Assume Delph uses departmental predetermined overhead rates based on machine-hours.
a. Compute the departmental predetermined overhead rates.
b. Compute the total manufacturing cost assigned to Job D-70 and Job C-200.
c. If Delph establishes bid prices that are 140% of total manufacturing costs, what bid prices would it have established for Job D-70 and Job C-200?
d. What is Delph’s cost of goods sold for the year?
In: Accounting
Mr. and Mrs. Compton paid $9,280 of medical expenses that were
not reimbursed by their private insurance provider.
In: Accounting
13.
The capital accounts of Harrison and Marti have balances of
$160,000 and $110,000, respectively, on January 1, the beginning of
the current fiscal year. On April 10, Harrison invested an
additional $20,000. During the year, Harrison and Marti withdrew
$96,000 and $78,000, respectively, and net income for the year was
$264,000. The articles of partnership make no reference to the
division of net income.
Based on this information, the statement of partners' equity would
show what amount as total capital for the partnership on December
31?
a.$52,000
b.$164,000
c.$216,000
d.$380,000
In: Accounting
2016 Actual Results 2017 initial forecast
| earnings per share | $50 | $67 |
| gross profit | $3,000 | $3,900 |
| cost of goods sold | (12,000) | (15,600) |
| interest | (300) | (300) |
| common dividends | (535) | (535) |
| fixed operating costs except depreciation | (750) | (975) |
| addition to retained earnings | $455 | $806 |
| net sales | $15,000 | $19,500 |
| dividends per share | $27 | $27 |
| depreciation | (300) | (390) |
| net income | $990 | 1,341 |
| earnings before tax | $1,650 | $2,235 |
| earnings before interest and taxes | $1,950 | $2,535 |
| number of common shares (millions) | 20.0 | 20.0 |
| taxes | (660) | (894) |
Question:
You are the most creative analyst for your company Inc., and your
admirers want to see you work your analytical magic once
more.
Which of the following are assumptions made by the initial income
statement forecast? Check all that apply.
a. additional external financing will be required by your
company.
b. the forecasted increase in net sales is 30%
c. the facility is currently operating at full capacity
d. the facility is no currently operating at full capacity.
e. the assigned depreciation method has changed.
f. no additional external financing will be required.
Part two
If the company above had neitiher a sufficient amount of excess
capacity to handle the forecasted increases in operations nor the
level of retained earnings required to increase asset levels up to
the necessary level for production, this difference would be
referred to as _____________________________________ and could be
acquired in which of the following forms?
a. alternative fiduciary necessities
b. additional funds needed
c. added fair needs
d. additional financing needed
In: Accounting
The amounts of the assets and liabilities of Nordic Travel Agency at December 31, 2019, the end of the year, and its revenue and expenses for the year follow. The capital of Ian Eisele, owner, was $645,000 on January 1, 2019, the beginning of the year. During the year, Ian withdrew $37,000.
| Accounts | Amounts |
|---|---|
| Accounts payable | $73,000 |
| Accounts receivable | 277,000 |
| Cash | 191,500 |
| Fees earned | 918,700 |
| Land | 547,000 |
| Miscellaneous expense | 6,000 |
| Rent expense | 34,000 |
| Supplies | 6,000 |
| Supplies expense | 4,200 |
| Utilities expense | 29,000 |
| Wages expense | 505,000 |
| Required: | |||
| 1. | Prepare an income statement for the year ended December 31, 2019.* | ||
| 2. | Prepare a statement of owner’s equity for the year ended December 31, 2019.* | ||
| 3. | Prepare a balance sheet as of December 31, 2019.* | ||
| 4. | What item appears on both the
statement of owner’s equity and the balance sheet?
|
In: Accounting
Exercise 2-15 Plantwide and Departmental Predetermined Overhead Rates; Job Costs [LO2-1, LO2-2, LO2-3, LO2-4]
[The following
information applies to the questions displayed
below.]
Delph Company uses a job-order costing system and has two manufacturing departments—Molding and Fabrication. The company provided the following estimates at the beginning of the year:
| Molding | Fabrication | Total | |||||
| Machine-hours | 31,000 | 41,000 | 72,000 | ||||
| Fixed manufacturing overhead costs | $ | 740,000 | $ | 210,000 | $ | 950,000 | |
| Variable manufacturing overhead cost per machine-hour | $ | 5.50 | $ | 5.50 | |||
During the year, the company had no beginning or ending inventories and it started, completed, and sold only two jobs—Job D-70 and Job C-200. It provided the following information related to those two jobs:
| Job D-70: | Molding | Fabrication | Total | |||
| Direct materials cost | $ | 378,000 | $ | 322,000 | $ | 700,000 |
| Direct labor cost | $ | 230,000 | $ | 160,000 | $ | 390,000 |
| Machine-hours | 24,000 | 7,000 | 31,000 | |||
| Job C-200: | Molding | Fabrication | Total | |||
| Direct materials cost | $ | 290,000 | $ | 230,000 | $ | 520,000 |
| Direct labor cost | $ | 160,000 | $ | 270,000 | $ | 430,000 |
| Machine-hours | 7,000 | 34,000 | 41,000 | |||
Delph had no underapplied or overapplied manufacturing overhead during the year.
Exercise 2-15 Part 1
Required:
1. Assume Delph uses a plantwide predetermined overhead rate based on machine-hours.
a. Compute the plantwide predetermined overhead rate.
b. Compute the total manufacturing cost assigned to Job D-70 and Job C-200.
In: Accounting