The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the company’s products is increasing, and management requests assistance from you in determining an economical sales and production mix for the coming year. The company has provided the following data:

The following additional information is available:  

1. The company’s plant has a capacity of 100,400 direct labor-hours per year on a single-shift basis. The company’s present employees and equipment can produce all five products.

2. The direct labor rate of $10 per hour is expected to remain unchanged during the coming year.

3. Fixed manufacturing costs total $575,000 per year. Variable overhead costs are $2 per direct labor-hour.

4. All of the company’s nonmanufacturing costs are fixed.

5. The company’s finished goods inventory is negligible and can be ignored.

Required:

1. How many direct labor hours are used to manufacture one unit of each of the company’s five products?

2. How much variable overhead cost is incurred to manufacture one unit of each of the company’s five products?

3. What is the contribution margin per direct labor-hour for each of the company’s five products?

4. Assuming that direct labor-hours is the company’s constraining resource, what is the highest total contribution margin that the company can earn if it makes optimal use of its constrained resource?

5. Assuming that the company has made optimal use of its 100,400 direct labor-hours, what is the highest direct labor rate per hour that Walton Toy Company would be willing to pay for additional capacity (that is, for added direct labor time)?

Direct Labor Variances

The following data relate to labor cost for production of 7,200 cellular telephones:

a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

b. The employees may have been less-experienced or poorly trained, thereby resulting in a   labor rate than planned. The lower level of experience or training may have resulted in   efficient performance. Thus, the actual time required was   than standard.

On June 1, 2008, Coltec Industry purchased $503,000, 11% bonds, with interest payable on January 1 and July 1, for $366,844, INCLUDING accrued interest. The bonds mature on October 1, 2017. Amortization is recorded using the straight-line method and the bonds are classified as available-for-sale. On December 31, 2011, the bonds were adjusted to their proper carrying value when their fair value was $374,897. The fair market value of the bonds on December 31, 2010 was $436,050. What is the NET INCOME or LOSS recorded on the Income Statement of Coltec Industry for 2011 solely as a result of these bonds? Note: Accrue interest and amortize premium/discount on a monthly basis. Round your answer to the nearest whole dollar. If NET INCOME results, enter your answer as a positive number. If NET LOSS results, place a minus sign '-' prior to the amount of the loss.

Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler’s personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University. Tami’s Creations, Inc. Income Statement For the Quarter Ended March 31 Sales (28,700 units) $ 1,148,000 Variable expenses: Variable cost of goods sold $ 444,850 Variable selling and administrative 195,160 640,010 Contribution margin 507,990 Fixed expenses: Fixed manufacturing overhead 253,600 Fixed selling and administrative 266,390 519,990 Net operating loss $ ( 12,000) Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for a bank loan. Another friend, a CPA, insists that the company should be using absorption costing rather than variable costing and argues that if absorption costing had been used the company probably would have reported at least some profit for the quarter. At this point, Ms. Tyler is manufacturing only one product—a swimsuit. Production and cost data relating to the swimsuit for the first quarter follow: Units produced 31,700 Units sold 28,700 Variable costs per unit: Direct materials $ 7.40 Direct labor $ 6.40 Variable manufacturing overhead $ 1.70 Variable selling and administrative $ 6.80 Required: 1. Complete the following: a. Compute the unit product cost under absorption costing. b. What is the company’s absorption costing net operating income (loss) for the quarter? c. Reconcile the variable and absorption costing net operating income (loss) figures. 3. During the second quarter of operations, the company again produced 31,700 units but sold 34,700 units. (Assume no change in total fixed costs.) a. What is the company’s variable costing net operating income (loss) for the second quarter? b. What is the company’s absorption costing net operating income (loss) for the second quarter? c. Reconcile the variable costing and absorption costing net operating incomes for the second quarter. Garrison 16e Rechecks 2017-05-04, 2017-12-06, 2018-08-21 rev: 03_26_2019_QC_CS-163919

Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $49,900; total assets, $189,400; common stock, $84,000; and retained earnings, $44,119.)

* These are short-term notes receivable arising from customer (trade) sales.

Required:
Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory turnover, (5) days' sales in inventory, (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on common stockholders' equity. (Do not round intermediate calculations.)

The stockholders’ equity section of Flint Inc. at the beginning of the current year appears. Common stock, $10 par value, authorized 1,097,000 shares, 281,000 shares issued and outstanding $2,810,000 Paid-in capital in excess of par—common stock 554,000 Retained earnings 556,000 During the current year, the following transactions occurred.

1. The company issued to the stockholders 92,000 rights. Ten rights are needed to buy one share of stock at $30. The rights were void after 30 days. The market price of the stock at this time was $32 per share.

2. The company sold to the public a $217,000, 10% bond issue at 103. The company also issued with each $100 bond one detachable stock purchase warrant, which provided for the purchase of common stock at $28 per share. Shortly after issuance, similar bonds without warrants were selling at 96 and the warrants at $7.

3. All but 4,600 of the rights issued in (1) were exercised in 30 days.

4. At the end of the year, 80% of the warrants in (2) had been exercised, and the remaining were outstanding and in good standing.

5. During the current year, the company granted stock options for 9,800 shares of common stock to company executives. The company, using a fair value option-pricing model, determines that each option is worth $10. The option price is $28. The options were to expire at year-end and were considered compensation for the current year.

6. All but 980 shares related to the stock-option plan were exercised by year-end. The expiration resulted because one of the executives failed to fulfill an obligation related to the employment contract.

Prepare general journal entries for the current year to record the transactions listed above

Statement of Cash Flows—Direct Method applied to PR 16-1A The comparative balance sheet of Navaria Inc. for December 31, 20Y3 and 20Y2, is as follows: Dec. 31, 20Y3 Dec. 31, 20Y2 Assets Cash $ 182,540 $ 171,780 Accounts receivable (net) 66,760 61,250 Inventories 188,170 180,930 Investments 0 70,400 Land 96,450 0 Equipment 205,640 161,920 Accumulated depreciation-equipment (48,800) (43,600) Total assets $690,760 $602,680 Liabilities and Stockholders' Equity Accounts payable $ 124,670 $ 118,730 Accrued expenses payable 12,540 15,670 Dividends payable 6,800 5,400 Common stock, $1 par 36,800 28,330 Paid-in capital: Excess of issue price over par-common stock 140,200 81,960 Retained earnings 369,750 352,590 Total liabilities and stockholders’ equity $690,760 $602,680 The income statement for the year ended December 31, 20Y3, is as follows: Sales $1,163,710 Cost of merchandise sold 715,680 Gross profit $ 448,030 Operating expenses: Depreciation expense $ 5,200 Other operating expenses 379,370 Total operating expenses 384,570 Operating income $ 63,460 Other income: Gain on sale of investments 11,800 Income before income tax $ 75,260 Income tax expense 30,100 Net income $ 45,160 Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows: The investments were sold for $82,200 cash. Equipment and land were acquired for cash. There were no disposals of equipment during the year. The common stock was issued for cash. There was a $28,000 debit to Retained Earnings for cash dividends declared. Required: Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Navaria Inc. Statement of Cash Flows For the Year Ended December 31, 20Y3 Cash flows from operating activities: $ Net cash flow from operating activities $ Cash flows from (used for) investing activities: $ Net cash flow used for investing activities Cash flows from (used for) financing activities: $ Net cash flow from financing activities $ Cash at the beginning of the year Cash at the end of the year $

The beginning inventory consisted of 20,000 units, 40 percent complete and the ending inventory consisted of 12,000 units, 50 percent complete. There were 30,000 units started during the period.

Determine the equivalent units of conversion in process.

a. 32,000b. 38,000c. 20,000d. 44,000

a. Compute the current ratio for the current year. ​(Abbreviations used: STI​ = Short-term investments. Round your answer to two decimal​ places, X.XX.)

b. Compute the cash ratio for the current year. ​(Round your answer to two decimal​ places, X.XX.)

c. Compute the​ acid-test ratio for the current year. ​(Round your answer to two decimal​ places, X.XX.)

d. Compute the inventory turnover for the current year. ​(Round your answer to two decimal​ places, X.XX.)

e. Compute the​ days' sales in inventory for the current year. ​(Round intermediary calculations to two decimal​ places, X.XX and round your final answer to the nearest whole​ day.)

f. Compute the​ days' sales in receivables for the current year. ​(Round intermediary calculations to two decimal​ places, X.XX and round your final answer to nearest whole​ day.)

g. Compute the gross profit percentage for the current year. ​(Round your answer to one tenth of a​ percent, X.X%.)

Lindon Company is the exclusive distributor for an automotive product that sells for $58.00 per unit and has a CM ratio of 30%. The company’s fixed expenses are $435,000 per year. The company plans to sell 30,000 units this year.

Required:

1. What are the variable expenses per unit? (Round your "per unit" answer to 2 decimal places.)

2. What is the break-even point in unit sales and in dollar sales?

3. What amount of unit sales and dollar sales is required to attain a target profit of $261,000 per year?

4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $5.80 per unit. What is the company’s new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $261,000?

In June 2018 Phillip and Barbara Jones and their two dependent children, who are both over 17, moved from Chicago to Albuquerque, New Mexico, a distance of 1,327 miles, which they drove in their own car. The children’s names are Roger and Gwen and both will be attending the University of New Mexico in the fall, Roger as a freshman and Gwen as a junior. The move was a result of a civilian job transfer for Phillip. The distance from their old home to Phillip’s old office was 30 miles. Barbara quit her job in Chicago and decided to perform volunteer work for a year before seeking further employment. Phillip and Barbara incurred expenses of $4,550 to the moving company (which included $320 for temporary furniture storage), hotel charges of $550, and meals of $712 en route from Chicago to Albuquerque. Their new home is located at 7432 Desert Springs Way, Albuquerque, NM 87101. Phillip, but not Barbara, was employed in the new location throughout the year. Phillip’s social security number is 412-34-5670 (date of birth 6/12/1976), Barbara’s is 412-34-5671 (date of birth 8/12/1978), Roger’s is 412-34-5672 (date of birth 2/17/2001), and Gwen’s is 412-34-5673 (date of birth 9/14/1999). The Joneses had qualifying health care coverage at all times during the tax year.

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Question: In June 2018 Phillip and Barbara Jones and their two dependent children, who are both over 17, mo...

In June 2018 Phillip and Barbara Jones and their two dependent children, who are both over 17, moved from Chicago to Albuquerque, New Mexico, a distance of 1,327 miles, which they drove in their own car. The children’s names are Roger and Gwen and both will be attending the University of New Mexico in the fall, Roger as a freshman and Gwen as a junior. The move was a result of a civilian job transfer for Phillip. The distance from their old home to Phillip’s old office was 30 miles. Barbara quit her job in Chicago and decided to perform volunteer work for a year before seeking further employment. Phillip and Barbara incurred expenses of $4,550 to the moving company (which included $320 for temporary furniture storage), hotel charges of $550, and meals of $712 en route from Chicago to Albuquerque. Their new home is located at 7432 Desert Springs Way, Albuquerque, NM 87101. Phillip, but not Barbara, was employed in the new location throughout the year. Phillip’s social security number is 412-34-5670 (date of birth 6/12/1976), Barbara’s is 412-34-5671 (date of birth 8/12/1978), Roger’s is 412-34-5672 (date of birth 2/17/2001), and Gwen’s is 412-34-5673 (date of birth 9/14/1999). The Joneses had qualifying health care coverage at all times during the tax year.

Phillip is a civil engineer for a national firm; his W-2 contained the following information:

In addition, both he and Barbara received Forms 1098-E from the federal student loan program. Phillip had student loan interest of $1,050, and Barbara had student loan interest of $750.

Prepare a Form 1040, and a Student Loan Interest Deduction Worksheet for Phillip and Barbara. (List the names of the taxpayers in the order in which they appear in the problem. Do not round intermediate computations. Round your final answers to the nearest whole dollar amount. Input all the values as positive numbers. Instructions can be found on certain cells within the forms.)

The following adjusted trial balance information (with accounts in alphabetical order) for Willis Tour Co. Inc. as at December 31, 2017, was made available after its second year of operations:

Required:
The dividends declared by Willis in the amount of $4,500 during the year ended December 31, 2017, were debited directly to retained earnings. Prepare an income statement (in multi-step format), and a classified balance sheet for Willis Tour Co. Inc. using the information provided. Include the appropriate presentation for earnings per share. (Round the "Earnings per Share" answers to 2 decimal places. Negative amounts should be indicated by a minus sign.)

The November 30, 2017, unadjusted trial balance of Business Solutions is found in the Trial balance tab. Business Solutions had the following transactions and events in December 2017.
General journal, General ledger, Trial balance, Income statement, St Retained earnings, Balance sheet, Impact on Income

The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the company’s first three months:

1. The December 31 inventory count of computer supplies shows $580 still available.
2. Three months have expired since the 12-month insurance premium was paid in advance.
3. As of December 31, Lyn Addie has not been paid for four days of work at $125 per day.
4. The computer system, acquired on October 1, is expected to have a four-year life with no salvage value.
5. The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value.
6. Three of the four months’ prepaid rent has expired.

1. Assume that a Parent company acquires a 75% interest in its Subsidiary on January 1, 2016.  On the date of acquisition, the fair value of the 75% controlling interest was $1,800,000 and the fair value of the 25% noncontrolling interest was $600,000.  On January 1, 2016, the book value of net assets equaled $2,400,000 and the fair value of the identifiable net assets equaled the book value of identifiable net assets (i.e. there was no AAP or Goodwill). The parent uses the equity method to account for its investment in the subsidiary.

On December 31, 2017, the Subsidiary company issued $1,500,000 (face) 6 percent, five-year bonds to an unaffiliated company for $1,380,218 (i.e. the bonds had an effective yield of 8 percent).  The bonds pay interest annually on December 31, and the bond discount is amortized using the straight-line method.  This results in annual bond-payable discount amortization equal to $23,956 per year.

On December 31, 2019, the Parent paid $1,540,849 to purchase all of the outstanding Subsidiary company bonds (i.e. the bonds had an effective yield of 5 percent).  The bond premium is amortized using the straight-line method, which results in annual bond-investment premium amortization equal to $13,616 per year.

The Parent and the Subsidiary report the following financial statements for the year ended December 31, 2020:

Required:

Provide the consolidation entries and prepare a consolidation worksheet for the year ended December 31, 2018.

Delaney Company leases an automobile with a fair value of $10,000 from Simon Motors, Inc., on the following terms. 1. Non-cancelable term of 50 months. 2. Rental of $200 per month (at the beginning of each month). (The present value at 0.5% per month is $8,873.) 3. Delaney guarantees a residual value of $1,180 (the present value at 0.5% per month is $920). Delaney expects the probable residual value to be $1,180 at the end of the lease term. 4. Estimated economic life of the automobile is 60 months. 5. Delaney’s incremental borrowing rate is 6% a year (0.5% a month). Simon’s implicit rate is unknown. Instructions (a) What is the nature of this lease to Delaney? (b) What is the present value of the lease payments to determine the lease liability? (c) Based on the original fact pattern, record the lease on Delaney’s books at the date of commencement. (d) Record the first month’s lease payment (at commencement of the lease). (e) Record the second month’s lease payment. (f) Record the first month’s amortization on Delaney’s books (assume straight-line). (g) Suppose that instead of $1,180, Delaney expects the residual value to be only $500 (the guaranteed amount is still $1,180). How does the calculation of the present value of the lease payments change from part (b)? Please be sure to use current law change