Assuming Orie and Jane’s goal is to minimize their current federal income tax exposure, one can compare the married filing joint and corporate tax rates to achieve this goal. Since Orie and Jane have $200,000 of taxable income not related to their sole proprietorship, they are currently in the 24 percent tax bracket. The task is to allocate the $250,000 between Orie and Jane and their corporation to minimize their current liability. The corporate tax rate is 21 percent and is lower than Orie and Jane’s marginal tax rate of 24 percent. To take advantage of the 21 percent corporate tax rate, all of the expected $250,000 in profits should be retained in the corporation. Any income shifted to Orie and Jane would be taxed at a rate higher than the corporate tax rate of 21 percent.
In: Accounting
6. Buffalo Company manufactures and sells adjustable canopies that attach to motor homes and trailers. For its budget, Buffalo estimated the following:
Selling price $420
Variable cost per canopy $205
Annual fixed costs $180,000
Net Income $250,000
Income Tax Rate 30%
The May financial statements reported that sales were not meeting expectations. For the first 5 months of the year, only 350 units had been sold at the established price with variable costs as planned. It was clear that the net income projection for the year would not be reached unless some actions were taken. A management committee presented the following mutually exclusive alternatives to the president:
A. Reduce the selling price by $40 per unit. The sales forecast that at this significantly reduced price is which 2,800 units can be sold during the remainder of the year. Total fixed costs and variable costs per unit will stay as budgeted.
B. Lower variable cost per unit by $10 through the use of less expensive direct materials and slightly modified manufacturing techniques. The selling price will also be reduced by $30 and sales of 2,200 units are expected for the remainder of the year.
C. Reduce fixed costs by $10,000 and lower the selling price by 5%. Variable costs per unit will be unchanged and sales of 2,000 units are expected for the remainder of the year.
Required:
(1) If no changes are made to the selling price or cost structure, determine the number of units that Buffalo must sell to break even and achieve its net income objective.
(2) Determine which alternative Buffalo should select to achieve maximum net income.
In: Accounting
The following is Baker Co.'s Pre-Closing Trial Balance as of December 31, 2017. Baker's accounting period is a month, thus the balances in the temporary accounts are for the month of December 2017.
|
Account |
Debit |
Credit |
|
Cash |
10,000 |
|
|
Accounts Receivable |
25,000 |
|
|
Inventory |
40,000 |
|
|
Supplies |
5,000 |
|
|
Equipment |
100,000 |
|
|
Accumulated Depreciation |
30,000 |
|
|
Accounts Payable |
12,000 |
|
|
Note Payable |
13,000 |
|
|
Interest Payable |
3,000 |
|
|
Unearned Revenue |
8,000 |
|
|
Dividends Payable |
7,000 |
|
|
Common Stock |
10,000 |
|
|
Retained Earnings |
46,000 |
|
|
Sales Revenue |
193,000 |
|
|
Cost of Goods Sold |
78,000 |
|
|
Depreciation Expense |
18,000 |
|
|
Wages Expense |
42,000 |
|
|
Supplies Expense |
3,000 |
|
|
Interest Expense |
1,000 |
|
|
Total |
322,000 |
322,000 |
Use the information in Baker’s Trial balance to answer questions D through H.
D. In the General Journal below record the journal entry that should be made to close the Revenue account(s).
E. In the General Journal below record the journal entry that should be made to close the Expense accounts.
F. Based on Baker’s account balances, the amount of Net Income that would be shown on Baker’s Income Statement for December 2017 would be:
G. Based on Baker’s account balances, the amount of Total Assets that would be shown on Baker’s Balance Sheet as of December 31, 2017 would be:
H. Based on Baker’s account balances, the amount of Total Equity that would be shown on Baker’s Balance Sheet as of December 31, 2017 would be:
In: Accounting
create procedures you can use as a bookkeeper as part of your duties related to payroll.
include the following points:
Enter employee pay records.
Process payroll.
Reconcile payroll.
Update payroll records.
Payroll enquiries.
End of quarter.
End of financial year.
Back-up.
Complete payroll component of BAS.
In: Accounting
During its first year of operations, Eastern Data Links
Corporation entered into the following transactions relating to
shareholders’ equity. The articles of incorporation authorized the
issue of 7 million common shares, $1 par per share, and 1 million
preferred shares, $50 par per share.
| Feb. | 12 | Sold 2 million common shares, for $10 per share. | ||
| 13 | Issued 35,000 common shares to attorneys in exchange for legal services. | |||
| 13 | Sold 76,000 of its common shares and 4,000 preferred shares for a total of $1,015,000. | |||
| Nov. | 15 | Issued 400,000 of its common shares in exchange for equipment for which the cash price was known to be $3,908,000. |
Required:
Prepare the appropriate journal entries to record each transaction.
(If no entry is required for a particular transaction,
select "No journal entry required" in the first account field.
Enter your answers in whole dollars.)
In: Accounting
On January 1 of Year 1, Lily Company issued bonds with a coupon rate of 7% and a face amount of $3,000. The bond interest payments are made twice each year on June 30 and on December 31. The bonds mature in 12 years. The market interest rate for bonds with the same degree of riskiness is 10% compounded semi-annually. On January 1 of Year 1,Investor Company purchased all of the Lily Company bonds when they were issued. Investor Company has classified this investment in bonds as a held-to-maturity investment. What is the total amount of interest revenue that Investor Company will report in Year 1 in connection with this bond investment? Of course, Investor Company uses the effective interest amortization method. Note: Round all of your calculations to the nearest penny.
|
$237.90 |
|
|
$28.60 |
|
|
$620.94 |
|
|
$62.09 |
|
|
$210.00 |
|
|
$238.60 |
In: Accounting
Carla Cole Inc. acquired the following assets in January of 2015. Equipment, estimated service life, 5 years; salvage value, $16,000 $559,000 Building, estimated service life, 30 years; no salvage value $675,000 The equipment has been depreciated using the sum-of-the-years’-digits method for the first 3 years for financial reporting purposes. In 2018, the company decided to change the method of computing depreciation to the straight-line method for the equipment, but no change was made in the estimated service life or salvage value. It was also decided to change the total estimated service life of the building from 30 years to 40 years, with no change in the estimated salvage value. The building is depreciated on the straight-line method.
(a) Prepare the general journal entry to record depreciation expense for the equipment in 2018.
(b) Prepare the journal entry to record depreciation expense for the building in 2018.
In: Accounting
For the current year, Sarah has salary of 50,000. In addition, she has the following capital transactions:
Long-term capital gain (15%) 12,000
Short-term capital gain 8,000
Long-term capital loss (28%) (4,000)
Short-term capital loss (10,000)
What is her taxable income for the year? She has a short-term capital loss carry-over of 5,000 from the previous year. The standard deduction amount for her is 12,000
Question 6 options:
|
37,000 |
|
|
39,000 |
|
|
49,000 |
|
|
59,000 |
|
|
None of the above |
In: Accounting
What are the major differences between job-order costing and process costing systems? Give an example of a well-known company that might use job-order costing and an example of a well-known company that might use process costing. Explain why you have chosen the companies that you did, specifically why job order costing or process costing are used. Do not choose companies that your classmates have already commented upon. Participate in follow-up discussion by critiquing your classmates' choices of companies.
Please include proper citations in your discussion post.
Please provide a original answer.
In: Accounting
what the impact of a specific technology on auditing.
Provide a description of the technology, an explanation of its
current and potential future impact on auditing, and a suggestion
of how auditing and auditors can better adapt to the changes
brought about by the technology.
Technology Description: Provide a brief description of
the technology you chose.
Impact on Auditing: Provide an explanation of the current impact
of the technology on auditing and its potential future impact.
Support your analysis
with research.
Suggestions for Adapting: Provide suggestions for how auditors
can better adapt to the changes brought about by the technology. If
the technology you chose creates challenges for the profession,
make suggestions for how auditors can adapt to meet these
challenges. If the technology offers opportunities for the
profession, make suggestions on how auditors can better adapt to
take advantage of these opportunities.
In: Accounting
The Assembly Department uses a process cost accounting system and a weighted-average cost flow assumption. The department adds materials at the beginning of the process and incurs conversion costs uniformly throughout the process. During July, $190,000 of materials costs and $137,100 in conversion costs were charged to the department. The beginning work in process inventory was $93,000 on July 1, comprised of $80,000 of materials costs and $13,000 of conversion costs.
Other data for the month of July are as follows:
Beginning work in process inventory, 7/1 25,000 units (40% complete)
Units completed and transferred out 70,000 units
Ending work in process inventory, 7/31 30,000 units (30% complete)
Answer the following questions and show computations to support your answers.
1. How many physical units have to be accounted for in July?
2. What are the equivalent units of production for materials and for conversion costs for the month of July?
3. What is the total cost assigned to the 70,000 units that were transferred out of the process in July?
4. What is the total cost of the July 31 inventory?
In: Accounting
Can You select any non- profit organization and explain the following?
1. Explain the funds that the nonprofit organization has, including their purpose and whether or not there are any restrictions to the funds?
2. Identify the classifications and the amounts in each of the nonprofit’s net assets, and explain the meaning of each classification.
In: Accounting
At the end of the period, a physical inventory count of goods actually in the warehouse showed that West, Inc. had $65,000 of goods on hand.West had $24,000 of goods out on consignment with a customer (West is the consignor) and $17,000 of goods on consignment from a vendor (West is the consignee). West had a purchase order (West is the buyer) for$8,000 of inventory (FOB destination) that was still in transit.Finally, West had sold $6,500 of inventory (FOB destination) that was also still in transit. What is the correct amount of ending inventory that West should record on its books?
|
$65,000 |
|
|
$72,000 |
|
|
$73,500 |
|
|
$78,500 |
|
|
$95,500 |
|
|
$86,500 |
Please explain how you reached the amount
In: Accounting
You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the company’s financial statements, including comparing Lydex’s performance to its major competitors. The company’s financial statements for the last two years are as follows:
| Lydex Company Comparative Balance Sheet |
||||
| This Year | Last Year | |||
| Assets | ||||
| Current assets: | ||||
| Cash | $ | 980,000 | $ | 1,140,000 |
| Marketable securities | 0 | 300,000 | ||
| Accounts receivable, net | 2,780,000 | 1,880,000 | ||
| Inventory | 3,620,000 | 2,200,000 | ||
| Prepaid expenses | 260,000 | 200,000 | ||
| Total current assets | 7,640,000 | 5,720,000 | ||
| Plant and equipment, net | 9,560,000 | 9,070,000 | ||
| Total assets | $ | 17,200,000 | $ | 14,790,000 |
| Liabilities and Stockholders' Equity | ||||
| Liabilities: | ||||
| Current liabilities | $ | 4,030,000 | $ | 2,780,000 |
| Note payable, 10% | 3,680,000 | 3,080,000 | ||
| Total liabilities | 7,710,000 | 5,860,000 | ||
| Stockholders' equity: | ||||
| Common stock, $75 par value | 7,500,000 | 7,500,000 | ||
| Retained earnings | 1,990,000 | 1,430,000 | ||
| Total stockholders' equity | 9,490,000 | 8,930,000 | ||
| Total liabilities and stockholders' equity | $ | 17,200,000 | $ | 14,790,000 |
| Lydex Company Comparative Income Statement and Reconciliation |
||||
| This Year | Last Year | |||
| Sales (all on account) | $ | 15,880,000 | $ | 13,780,000 |
| Cost of goods sold | 12,704,000 | 10,335,000 | ||
| Gross margin | 3,176,000 | 3,445,000 | ||
| Selling and administrative expenses | 1,436,571 | 1,612,000 | ||
| Net operating income | 1,739,429 | 1,833,000 | ||
| Interest expense | 368,000 | 308,000 | ||
| Net income before taxes | 1,371,429 | 1,525,000 | ||
| Income taxes (30%) | 411,429 | 457,500 | ||
| Net income | 960,000 | 1,067,500 | ||
| Common dividends | 400,000 | 533,750 | ||
| Net income retained | 560,000 | 533,750 | ||
| Beginning retained earnings | 1,430,000 | 896,250 | ||
| Ending retained earnings | $ | 1,990,000 | $ | 1,430,000 |
To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company’s industry:
| Current ratio | 2.4 | |
| Acid-test ratio | 1.2 | |
| Average collection period | 32 | days |
| Average sale period | 60 | days |
| Return on assets | 9.5 | % |
| Debt-to-equity ratio | 0.68 | |
| Times interest earned ratio | 5.8 | |
| Price-earnings ratio | 10 | |
Required:
1. Present the balance sheet in common-size format.
2. Present the income statement in common-size format down through net income.
In: Accounting
Barkley Company sells two products, red cups and black mugs. Barkley predicts that it will sell
2,600 red cups and 700black mugs in the next period. The unit contribution margins for red cups and black mugs are
$ 3.00 and $ 3.90 respectively. What is the weighted average unit contribution margin? (Round the final answer to the nearest cent.)
A.$ 11.14
B.$ 4.05
C.$ 0.83
D.$ 3.19
In: Accounting