Rundle Company is a retail company that specializes in selling outdoor camping equipment. The company is considering opening a new store on October 1, 2019. The company president formed a planning committee to prepare a master budget for the first three months of operation. As budget coordinator, you have been assigned the following tasks:

Problem 14-23 Part 1

Required

1. October sales are estimated to be $350,000, of which 35 percent will be cash and 65 percent will be credit. The company expects sales to increase at the rate of 20 percent per month. Prepare a sales budget.

2. The company expects to collect 100 percent of the accounts receivable generated by credit sales in the month following the sale. Prepare a schedule of cash receipts.

3. The cost of goods sold is 70 percent of sales. The company desires to maintain a minimum ending inventory equal to 20 percent of the next month’s cost of goods sold. However, ending inventory of December is expected to be $13,100. Assume that all purchases are made on account. Prepare an inventory purchases budget.

4. The company pays 60 percent of accounts payable in the month of purchase and the remaining 40 percent in the following month. Prepare a cash payments budget for inventory purchases.

5. Budgeted selling and administrative expenses per month follow:

1. *The capital expenditures budget indicates that Rundle will spend $153,400 on October 1 for store fixtures, which are expected to have a $31,000 salvage value and a two-year (24-month) useful life.

Use this information to prepare a selling and administrative expenses budget.

6. Utilities and sales commissions are paid the month after they are incurred; all other expenses are paid in the month in which they are incurred. Prepare a cash payments budget for selling and administrative expenses.

7. Rundle borrows funds, in increments of $1,000, and repays them on the last day of the month. Repayments may be made in any amount available. The company also pays its vendors on the last day of the month. It pays interest of 2 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $23,000 cash cushion. Prepare a cash budget.

Rundle Company is a retail company that specializes in selling outdoor camping equipment. The company is considering opening a new store on October 1, 2019. The company president formed a planning committee to prepare a master budget for the first three months of operation. As budget coordinator, you have been assigned the following tasks:

Problem 14-23 Part 2

8. Prepare a pro forma income statement for the quarter.

9. Prepare a pro forma balance sheet at the end of the quarter.

10. Prepare a pro forma statement of cash flows for the quarter.

The cash account for American Medical Co. at April 30 indicated a balance of $14,740. The bank statement indicated a balance of $17,460 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:

1. Checks outstanding totaled $6,290.
2. A deposit of $6,550, representing receipts of April 30, had been made too late to appear on the bank statement.
3. The bank collected $3,400 on a $3,230 note, including interest of $170.
4. A check for $440 returned with the statement had been incorrectly recorded by American Medical Co. as $400. The check was for the payment of an obligation to Targhee Supply Co. for a purchase on account.
5. A check drawn for $40 had been erroneously charged by the bank as $400.
6. Bank service charges for April amounted to $20.

Problem 12-9 Securities held-to-maturity; securities available for sale, trading securities and equity investments [LO12-1, 12-2, 12-3, 12-4, 12-5]

Amalgamated General Corporation is a consulting firm that also offers financial services through its credit division. From time to time the company buys and sells securities. The following selected transactions relate to Amalgamated’s investment activities during the last quarter of 2018 and the first month of 2019. The only securities held by Amalgamated at October 1 were $55 million of 10% bonds of Kansas Abstractors, Inc., purchased on May 1 at face value and held in Amalgamated’s trading portfolio. The company’s fiscal year ends on December 31.

Required:
Prepare the appropriate journal entry for each transaction or event. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5).)

• 1

  Record the purchase of 2 million preferred shares of Millwork Ventures Company for $63 million.

• 2

  Record the receipt of semiannual interest of $3.3 million from the Kansas Abstractors bonds.

• 3

  Record the purchase of 10% bonds of Holistic Entertainment Enterprises at their $120 million face value.

• 4

  Record the entry to adjust to fair value on the date of sale of the Kansas Abstractor bonds.

• 5

  Record the sale of the investment in Kansas Abstractors bonds.

• 6

  Record the purchase of 12% bonds of Household Plastics Corporation at their $40 million face value.

• 7

  Record the purchase of U.S. Treasury bonds for $7.5 million.

• 8

  Record the purchase of 4 million common shares of NXS Corporation for $54 million.

• 9

  Record the entry to adjust to fair value on the date of sale of the U.S. Treasury bonds.

• 10

  Record the sale of the Treasury bonds for $8.1 million.

• 11

  Record the receipt of cash dividends of $3 million from the Millwork Ventures Company preferred shares.

• 12

  Record the accrued interest.

• 13

  Record the entry to adjust to fair value for the Millwork Ventures preferred stock.

• 14

  Record the entry to adjust to fair value for the NXS Corporation common shares.

• 15

  Record the entry to adjust to fair value on the date of sale of the NXS Corporation common shares.

• 16

  Record the sale of the NXS Corporation common shares for $52 million.

Describe the application of cost volume profit analysis to a new restaurant concept as a memo

McCormick & Company is considering a project that requires an initial investment of $24 million to build a new plant and purchase equipment. The investment will be depreciated as a modified accelerated cost recovery system (MACRS) seven-year class asset. The new plant will be built on some of the company's land, which has a current, after-tax market value of $4.3 million. The company will produce bulk units at a cost of $130 each and will sell them for $420 each. There are annual fixed costs of $500,000. Unit sales are expected to be $150,000 each year for the next six years, at which time the project will be abandoned. At that time, the plant and equipment is expected to be worth $8 million (before tax) and the land is expected to be worth $5.4 million (after tax).To supplement the production process, the company will need to purchase $1 million worth of inventory. That inventory will be depleted during the final year of the project. The company has $100 million of debt outstanding with a yield to maturity of 8 percent, and has $150 million of equity outstanding with a beta of 0.9. The expected market return is 13 percent, and the risk-free rate is 5 percent. The company's marginal tax rate is 40 percent.

QUESTION 1- Should the project be accepted? What will be the tax depreciation each year?

What do we have in common or not?

1. Build an argument against requiring current market values on the balance sheet.

Utilizing the historical value on the balance sheet provides a look into the real transactional value of the asset. What the company paid is ultimately what the company paid – there is nothing left for interpretation. Utilizing the historical cost approach maintains consistency in the documentation of assets and liabilities. For example, in today’s COVID climate, a company could decide to report higher valuations of certain assets/liabilities to make their balance sheets look more appealing. Even if the exercise was done in all levels of honesty, the value of assets and liabilities can change daily – especially in a volatile economy, Giving businesses the autonomy to make valuation decisions could lead to a misrepresented balance sheet.

2. Build an argument against using historical cost.

Utilizing current market values can provide a more realistic view of the company’s overall worth. For example, if a company had purchased a building/property in 1970 for $100,000 that building/property would certainly be worth 5 -10 times more than that in 2020. In a situation where a company was trying to sell their business, understanding, and documenting, the current market value of an asset (like a building) would make for a more realistic balance sheet and the company’s overall worth.

3. Which of the two arguments do you find most convincing?

I feel that using historical cost method should still be used in order to properly document. I feel that footnotes in filing paperwork could easily outline the age and potential worth of an asset in question. I believe giving companies the option of noting what they “believe” is a value of an asset could cause them issues down the road on what they truly have as assets in the company.

------------------------------------------------------------------------

What do we have in common or not?

a. If assets will be recorded in the balance sheet at current market value it shall be subject to manipulation of accounts and financial statements . It is not possible in case of every assets to ascertain its current market value exactly in such case possibility of bias arises and it may results in distorted information. Thus chances of manipulation also arises.

b. Historical cost is price paid for asset, with time market cost may change but asset shall be recorded in financial statements at historical cost only. This will result in incomplete information because financial statements are showing historical cost which is not valid for current time.

c The most convincing argument is argument against requiring current market values on balance sheet(option a) because doing so will give rise to manipulation which shall effect users decisions. More over if assets are not shown at current market values which shall result in incomplete information this shortcoming can be eliminated by disclosing current market values in footnotes to financial statements.

Ashby clothing is a female clothing line selling high end winter apparel. The company has four brick and mortar locations in central Pa. All locations share the use of the professional back office staff personnel at the company's headquarters. In 2018 the cost of the marketing department was $133,500. The cost of the accounting department was $184,850. The cost of the information technology department was $61,155. Lastly, the customer service call center had a cost of $77,020. Below you will find information was provided about the operations about each store location. Question: Allocate the cost of the back office departments to each of the stores based on, (A) Total Revenue, (B) Gross Margin, and (C) Quantity of winter coats sold.

In your own words, describe each of the four financial statements. Go online and find the most recent set of financial statements for a publicly traded company that you are interested in and explain what you learned about that company from exploring its financial statements.

It is your first day as an intern at Frank's furniture, a major supplier of tables and chairs to some of the largest restaurants in the world. The Plant Controller has a big meeting tomorrow with the executive team and requests your help in preparing the financial information for the meeting. The Controller asks you to review the General Ledger accounts and prepare (A) an income statement and attach (B) a supporting cost of goods manufactured and sold statement.

The following is a partial audit program for the audit of cash receipts:

1. Review the cash receipts journal for large and unusual transactions.

2. Trace entries from the prelisting of cash receipts to the cash receipts journal to determine if each is recorded.

3. Compare customer name, date, and amount on the prelisting with the data on the cash receipts journal.

4. Examine the related remittance advice for entries selected from the prelisting to determine if cash discounts were approved.

5. Trace entries from the prelisting to the deposit slip to determine if each has been deposited.

Required:

1. Identify which audit procedures could be tested using attribute sampling.

2. What is the appropriate sampling unit for the tests in part (a)?

3. List the attributes for testing in part (a).

Matthew frequently purchased a food truck from a local supplier. He is considering travelling to Harrisburg for a local festival to sell his tacos. Before Matthew purchases a permit to sell food at the festival, he wants to calculate how much volume he would need to sell for the trip to be profitable. Matthew met with his accountant to determine his food costs and what his tax liability would be, which in fact is a modest 20% tax on profits. After reviewing the below information, calculate (A) What number of tacos Matthew must sell to break even. (B) What number of tacos Matthew must sell to make a profit before tax of $650. and (C) What number of tacos must Matthew sell to make an after tax profit of $400?

World Gourmet Coffee Company (WGCC) is a distributor and processor of different blends of coffee. The company buys coffee beans from around the world and roasts, blends, and packages them for resale. WGCC currently has 15 different coffees that it offers to gourmet shops in one-pound bags. The major cost is raw materials; however, there is a substantial amount of manufacturing overhead in the predominantly automated roasting and packing process. The company uses relatively little direct labor. Some of the coffees are very popular and sell in large volumes, while a few of the newer blends have very low volumes. WGCC prices its coffee at full product cost, including allocated overhead, plus a markup of 20 percent. If prices for certain coffees are significantly higher than market, adjustments are made. The company competes primarily on the quality of its products, but customers are price-conscious as well. Data for the 20x1 budget include manufacturing overhead of $12,532,320, which has been allocated on the basis of each product’s direct-labor cost. The budgeted direct-labor cost for 20x1 totals $1,253,232. Based on the sales budget and raw-material budget, purchases and use of raw materials (mostly coffee beans) will total $5,900,000. The expected prime costs for one-pound bags of two of the company’s products are as follows: Kona Malaysian Direct material $ 3.00 $ 4.00 Direct labor 0.50 0.50 WGCC’s controller believes the traditional product-costing system may be providing misleading cost information. She has developed an analysis of the 20x1 budgeted manufacturing-overhead costs shown in the following chart. Activity Cost Driver Budgeted Activity Budgeted Cost Purchasing Purchase orders 2,341 $ 2,387,820 Material handling Setups 3,640 2,966,600 Quality control Batches 1,460 598,600 Roasting Roasting hours 193,200 4,057,200 Blending Blending hours 67,600 1,419,600 Packaging Packaging hours 52,500 1,102,500 Total manufacturing-overhead cost $ 12,532,320 Data regarding the 20x1 production of Kona and Malaysian coffee are shown in the following table. There will be no raw-material inventory for either of these coffees at the beginning of the year. Kona Malaysian Budgeted sales 2,200 lb. 101,000 lb. Batch size 550 lb. 20,200 lb. Setups 3 per batch 3 per batch Purchase order size 550 lb. 50,500 lb. Roasting time 1 hr. per 100 lb. 1 hr. per 100 lb. Blending time 0.5 hr. per 100 lb. 0.5 hr. per 100 lb. Packaging time 0.1 hr. per 100 lb. 0.1 hr. per 100 lb.
Required: 1. Using WGCC’s current product-costing system:

a. Determine the company’s predetermined overhead rate using direct-labor cost as the single cost driver.

b. Determine the full product costs and selling prices of one pound of Kona coffee and one pound of Malaysian coffee.

2. Develop a new product cost, using an activity-based costing approach, for one pound of Kona coffee and one pound of Malaysian coffee.

Marwick’s Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,507 per unit and then sells them to retail customers for an average price of $2,900 each. The company’s selling and administrative costs for a typical month are presented below:

During August, Marwick’s Pianos, Inc., sold and delivered 60 pianos.

Required:

1. Prepare a traditional format income statement for August.
2. Prepare a contribution format income statement for August. Show costs and revenues on both a total and a per unit basis down through contribution margin.

What are the key management information requirements? 120–150 words

Please do not copy and paste from another source. Thanks

Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 75.00. During these years of part-time work, he will neither make deposits to nor take withdrawals from his retirement account. Exactly one year after the day he turns 75.0 when he fully retires, he will begin to make annual withdrawals of $135,088.00 from his retirement account until he turns 86.00. He he will make contributions to his retirement account from his 26th birthday to his 65th birthday. To reach his goal, what must the contributions be? Assume a 10.00% interest rate.