Indicate for each transaction below the account(s) and amount(s) that should be debited and credited. Use abbreviated account titles.

You have borrowed a loan of $20,000 from a bank to buy a car from Chase at the interest rate of

7.5% each year. You have promised the Chase to make mortgage style payments.

16. If you want to borrow this loan for three years, what is the total payment in each year?

            A) $6,191

             B) $1,500

             C) $ 7,691

             D) $ 7,154

             E) None of the above

17. If you want to borrow this loan for three years, what is the principal payment in year one?

            A) $6,191

             B) $1,500

             C) $ 7,691

             D) $ 7,154

             E) None of the above

18. If you want to borrow this loan for three years, what is the principal payment in year two?

            A) $6,191

             B) $1,500

             C) $ 7,691

             D) $ 7,154

             E) None of the above

19. If you want to borrow this loan for three years, what is the principal payment in year three?

            A) $6,191

             B) $1,500

             C) $ 7,691

             D) $ 7,154

             E) None of the above

20. If you want to borrow this loan for three years, what is the interest payment in year one?

            A) $6,191

             B) $1,500

             C) $ 7,691

             D) $ 7,154

             E) None of the above

21. If you want to borrow this loan for one year, what is the total payment?

            A) $21,500

             B) $20,000

             C) $1,500

             D) $7,691

             E) None of the above

22. If you want to borrow this loan for one year, what is the principal payment in this year?

            A) $21,500

             B) $20,000

             C) $1,500

             D) $7,691

             E) None of the above

23. If you want to borrow this loan for one year, what is the interest payment in this year?

            A) $21,500

             B) $20,000

             C) $1,500

             D) $7,691

             E) None of the above

24. If you want to borrow this loan for one year, what is the beginning balance in this year?

            A) $21,500

             B) $20,000

             C) $1,500

             D) $7,691

             E) None of the above

25. If you want to borrow this loan for one year, what is the ending balance in this year?

            A) $21,500

             B) $20,000

             C) $1,500

             D) $7,691

             E) None of the above

Lehman Pottery Company manufactures clay molded pottery on an assembly line. Its standard costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Finishing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production.

Data for the Assembly Department for August 2019 are:

Work in process, beginning inventory: 0 units

Units started during August 450 units

Work in process, ending inventory: 300 units

Direct materials (100% complete)

Conversion costs (60% complete)

Costs for August: Costs for Assembly:

Direct materials $58,000

Conversion costs $45,000

Using the 5 step format in the Textbook and solutions manual, prepare the Production Cost Worksheet using the Weighted Average Method.

Round to 2 digits when calculating the Cost per Equivalent Unit (Example $28.58)

Countywide Cable Services, Inc. is organized with three segments: Metro, Suburban, and Outlying. Data for these segments for the year just ended follow.

In addition to the expenses listed above, the company has $85,000 of common fixed expenses. Income-tax expense for the year is $285,000.

Required:

1. Prepare a segmented income statement for Countywide Cable Services, Inc.

what is the rationale for recognising a deferred tax asset or deferred tax liability?

Conlon Chemicals manufactures paint thinner. Information on the work in process follows:

• Beginning inventory, 42,700 partially complete gallons.

• Transferred out, 210,000 gallons.

• Ending inventory (materials are 19 percent complete; conversion costs are 10 percent complete).

• Started this month, 244,100 gallons.

Required:

a. Compute the equivalent units for materials using the weighted-average method.

Equivalent units (Gallons)

b. Compute the equivalent units for conversion costs using the weighted-average method.

Equivalent units (Gallons)

Comm Devices (CD) is a division of Worldwide Communications, Inc. CD produces restaurant pagers and other personal communication devices. These devices are sold to other Worldwide divisions, as well as to other communication companies. CD was recently approached by the manager of the Personal Communications Division regarding a request to make a special emergency-response pager designed to receive signals from anywhere in the world. The Personal Communications Division has requested that CD produce 11,700 units of this special pager. The following facts are available regarding the Comm Devices Division.

For each of the following independent situations, calculate the minimum transfer price, and determine whether the Personal Communications Division should accept or reject the offer.

(a)

The Personal Communications Division has offered to pay the CD Division $115 per pager. The CD Division has no available capacity. The CD Division would have to forgo sales of 9,360 pagers to existing customers in order to meet the request of the Personal Communications Division. (Note: The number of special pagers to be produced does not equal the number of existing pagers that would be forgone.)

b. The Personal Communications Division has offered to pay the CD Division $150 per pager. The CD Division has no available capacity. The CD Division would have to forgo sales of 15,600 pagers to existing customers in order to meet the request of the Personal Communications Division. (Note: The number of special pagers to be produced does not equal the number of existing pagers that would be forgone.)

c. The Personal Communications Division has offered to pay the CD Division $110 per pager. The CD Division has available capacity.

Ekon owns a small tow-truck business that responds to state patrol requests to tow cars involved in wrecks, as well as to private business requests from customers at various auto repair shops and individuals with stalled autos. Ekon’s business is open 24/7 for 365 days a year. He is starting to see too many repairs on his three trucks, which either means that he loses business or must divert a truck from another area. He is now trying to consider whether it is best to continue use of the current trucks or whether he needs to invest some money in new trucks. Using the steps for the process of capital decision-making, create an outline with sub-steps that include questions Ekon can use to guide his investigation or considerations of buying new trucks.

To help reduce the risk involved in capital investment, a process is required to thoughtfully select the best opportunity for the company.

The process for capital decision-making involves several steps:

1. Determine capital needs for both new and existing projects.
2. Identify and establish resource limitations.
3. Establish baseline criteria for alternatives.
4. Evaluate alternatives using screening and preference decisions.
5. Make the decision.

Describe how the direct, step-down and reciprocal cost allocation methods differ in the way they recognise reciprocal services among support departments.

Type to copy and paste

The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reports—the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 63 students enrolled in those two courses. Data concerning the company’s cost formulas appear below:

For example, administrative expenses should be $3,800 per month plus $44 per course plus $3 per student. The company’s sales should average $860 per student.

The company planned to run four courses with a total of 63 students; however, it actually ran four courses with a total of only 57 students. The actual operating results for September appear below:

Required:

Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

1. Schultz Clinic uses patient-visits as its measure of activity. The clinic bases its budgets on the following information: Revenue should be $40 per patient-visit. Personnel expenses should be $30,000 per month plus $11 per patient-visit. Medical supplies should be $1,000 per month plus $8 per patient-visit. Occupancy expenses should be $10,000 per month plus $1 per patient-visit. Administrative expenses should be $6,000 per month plus $1 per patient-visit.

The clinic reported the following actual results for February:

Prepare a report showing the clinic's revenue and spending variances for February. Label each variance as favorable (F) or unfavorable (U).