Questions
Transfer pricing is a contentious issue for almost any company where divisions buy from or sell...

Transfer pricing is a contentious issue for almost any company where divisions buy from or sell to each other. Stated another way, transfer pricing causes more conflict between divisions than almost any other issue.

What is you experience or knowledge about this issue? How do you suggest that it be resolved?

In: Accounting

The ledger of Whispering Winds Company contains the following balances: Retained Earnings $28,000, Dividends $1,500, Service...

The ledger of Whispering Winds Company contains the following balances: Retained Earnings $28,000, Dividends $1,500, Service Revenue $51,500, Salaries and Wages Expense $29,000, and Supplies Expense $6,000.

The closing entries are as follows:

(1)   Close revenue accounts.
(2) Close expense accounts.
(3) Close net income/(loss).
(4) Close dividends.


Enter the balances in T-accounts, post the closing entries, and underline and balance the accounts.

Salaries and Wages Expense

select an option                                                          Bal.(1)(2)(3)(4)

enter a debit amount

select an option                                                          Bal.(1)(2)(3)(4)

enter a credit amount

select an option                                                          Bal.(1)(2)(3)(4)

enter a debit balance

select an option                                                          Bal.(1)(2)(3)(4)

enter a credit balance

Supplies Expense

select an option                                                          Bal.(1)(2)(3)(4)

enter a debit amount

select an option                                                          Bal.(1)(2)(3)(4)

enter a credit amount

select an option                                                          Bal.(1)(2)(3)(4)

enter a debit balance

select an option                                                          Bal.(1)(2)(3)(4)

enter a credit balance

Service Revenue

select an option                                                          Bal.(1)(2)(3)(4)

enter a debit amount

select an option                                                          Bal.(1)(2)(3)(4)

enter a credit amount

select an option                                                          Bal.(1)(2)(3)(4)

enter a debit balance

select an option                                                          Bal.(1)(2)(3)(4)

enter a credit balance

Dividends

select an option                                                          Bal.(1)(2)(3)(4)

enter a debit amount

select an option                                                          Bal.(1)(2)(3)(4)

enter a credit amount

select an option                                                          Bal.(1)(2)(3)(4)

enter a debit balance

select an option                                                          Bal.(1)(2)(3)(4)

enter a credit balance

Income Summary

select an option                                                          Bal.(1)(2)(3)(4)

enter a debit amount

select an option                                                          Bal.(1)(2)(3)(4)

enter a credit amount

select an option                                                          Bal.(1)(2)(3)(4)

enter a debit balance

select an option                                                          Bal.(1)(2)(3)(4)

enter a credit balance

Retained Earnings

select an option                                                          Bal.(1)(2)(3)(4)

enter a debit amount

select an option                                                          Bal.(1)(2)(3)(4)

enter a credit amount

select an option                                                          Bal.(1)(2)(3)(4)

enter a debit amount

select an option                                                          Bal.(1)(2)(3)(4)

enter a credit amount

select an option                                                          Bal.(1)(2)(3)(4)

enter a debit balance

select an option                                                          Bal.(1)(2)(3)(4)

enter a credit balance

In: Accounting

9. X Company currently buys 10,000 units of a component part each year from a supplier...

9. X Company currently buys 10,000 units of a component part each year from a supplier for $7.10 each but is considering making them instead. Variable costs of making would be $4.90 per unit; additional annual fixed costs would be $6,000. Equipment would have to be purchased for $33,000 and will last for 7 years, at which time it will have a disposal value of $5,000. Assuming a discount rate of 4%, what is the net present value of making the part instead of continuing to buy it?

10. X Company must decide whether to continue using its current equipment or replace it with new, more efficient equipment. The following information is available for the current and new equipment:

Current equipment
   Current sales value $10,000
   Final sales value 6,500
   Operating costs 64,500
New equipment
   Purchase cost $46,000
   Final sales value 6,500
   Operating costs 55,000

Maintenance work will be necessary on the new equipment in Year 3, costing $2,000. The current equipment will last for five more years; the life of the new equipment is also five years. Assuming a discount rate of 4%, what is the net present value of replacing the current equipment?

In: Accounting

You are required to prepare the Sales price variance and Revenue sales quantity variance by taking...

  1. You are required to prepare the Sales price variance and Revenue sales quantity variance by taking any of your choice Saudi based company and suggest the suitable reasons for the variances. (3 Points)

Answer:

Playground Steel Factory is a leading manufacturer and supplier of Restaurant Seating, Tables & Other related Furniture, Indoor & Outdoor Playgrounds for Restaurants, Public & Private Parks, Public Houses, Hospitals, Schools and Furniture Seating for Shopping Centers, Sun Shades & Car Shades in the whole Kingdom of Saudi Arabia and Middle East Countries.

The Factory expected to sell 50,000 units from one of its products "Hospital seats" during 2018, the following is the planned sales and variable costs for 2018.

Sales (50,000 units)                      SR 3,000,000

Variable costs                                  1,750,000

During the year, a competitor came out with a similar hospital seats at a lower price. Management reacted by dropping its selling price for the hospital seat, but the actual sales dropped to 45,000 units at 55 SR per seat.

The cost accounting department prepare the sales price variance and revenue sales quantity variance.

Actual units sold at Actual Price

Actual units sold at Standard Price

Standard units sold at Standard Price

Actual Units

×

Actual Price

Actual Units

×

Standard Price

Standard

Units

×

Standard Price

45,000

×

55

45,000

×

60

50,000

×

60

2,475,000

2,700,000

3,000,000

Sales Price
Variance

Revenue sales

quantity variance

-225,000

-300,000

Unfavorable

Unfavorable

Revenue Budget Variance

-525,000

In: Accounting

E8-24 The Whole Bread Company bakes baguettes for distribution to upscale grocery stores. The company has...

E8-24 The Whole Bread Company bakes baguettes for distribution to upscale grocery stores. The company has two​ direct-cost categories: direct materials and direct manufacturing labor. The Whole Bread Company allocates fixed manufacturing overhead to products on the basis of standard direct manufacturing​ labor-hours.

Requirements 1. Prepare a variance analysis of fixed manufacturing overhead cost. 2. Is fixed overhead underallocated or​ overallocated? By what​ amount? 3. Comment on your results. Discuss the variances and explain what may be driving them.

The following is some budget data for the Whole Bread Company for 2017 and additional infomation for the year ended Decmeber​ 31, 2017​:

Direct manufacturing labor use 0.02 hours per baguette Fixed manufacturing overhead $5.00 per direct manufacturing labor-hour Data Table Planned (budgeted) output 2,800,000 baguettes Actual production 2,700,000 baguettes Budgeted direct manufacturing labor 56,000 hours Actual direct manufacturing labor 48,500 hours Actual fixed manufacturing overhead $284,000 Direct manufacturing labor use 0.02 hours per baguette Fixed manufacturing overhead $5.00 per direct manufacturing labor-hour Same Budgeted Lump Sum Actual Costs Regardless of Flexible Allocated Incurred Output Level Budget Overhead Fixed MOH

Same Budgeted
Lump Sum
Actual Costs Regardless of Flexible Allocated
Incurred Output Level Budget Overhead
Fixed MOH
Planned (budgeted) output 2,800,000 baguettes
Actual production 2,700,000 baguettes
Budgeted direct manufacturing labor 56,000 hours
Actual direct manufacturing labor 48,500 hours
Actual fixed manufacturing overhead $284,000

In: Accounting

On January 1, 2017, the dental partnership of Angela, Diaz, and Krause was formed when the...

On January 1, 2017, the dental partnership of Angela, Diaz, and Krause was formed when the partners contributed $39,000, $67,000, and $69,000, respectively. Over the next three years, the business reported net income and (loss) as follows:

2017 $ 79,000
2018 51,000
2019 (34,000 )

During this period, each partner withdrew cash of $15,000 per year. Krause invested an additional $6,000 in cash on February 9, 2018.

At the time that the partnership was created, the three partners agreed to allocate all profits and losses according to a specified plan written as follows:

  • Each partner is entitled to interest computed at the rate of 10 percent per year based on the individual capital balances at the beginning of that year.
  • Because of prior work experience, Angela is entitled to an annual salary allowance of $10,000 per year and Diaz is entitled to an annual salary allowance of $9,900 per year.
  • Any remaining profit will be split as follows: Angela, 20 percent; Diaz, 35 percent; and Krause, 45 percent. If a net loss remains after the initial allocations to the partners, the balance will be allocated: Angela, 30 percent; Diaz, 45 percent; and Krause, 25 percent.

Determine the ending capital balance for each partner as of the end of each of these three years. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.)

In: Accounting

Laraia Corporation has provided the following contribution format income statement. All questions concern situations that are...

Laraia Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range.


   Sales (3,000 units)   $150,000     
   Variable expenses   90,000     
   Contribution margin   60,000     
   Fixed expenses   48,000     
   Net operating income   $12,000     

g. If the variable cost per unit increases by $5, spending on advertising increases by $3,000, and unit sales increase by 450 units, what would be the estimated net operating income?
h. What is the break-even point in unit sales?
i. What is the break-even point in dollar sales?
j. Estimate how many units must be sold to achieve a target profit of $54,000.
k. What is the margin of safety in dollars?
l. What is the margin of safety percentage?
m. What is the degree of operating leverage?
n. Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 15% increase in sales?

In: Accounting

Comparative Balance Sheet of “Alpha- Beta” Assets 2018 2017 Liabilities & Stockholders’ Equity 2018 2017 Fixed...

Comparative Balance Sheet of “Alpha- Beta”
Assets 2018 2017 Liabilities &
Stockholders’ Equity
2018 2017
Fixed Assets
Property, Plant and
Equipment
Accumulated
depreciation
Net Property, Plant and
Equipment
Other Assets
Total Fixed Assets
Current Assets
Cash and Cash
Equivalents
Accounts receivables
Inventory
Prepaid Expenses
Total Current Assets
Total Assets
3,250,000
(425,000)
2,825,000
725,000
3,550,000
300,000
900,000
1,100,000
100,000
2,400,000
5,950,000
2,100,000
(250,000)
1,850,000
550,000
2,400,000
300,000
750,000
800,000
100,000
1,950,000
4,350,000
Shareholders’ Equity
Common Stock
Retained earnings
Total Stockholders’
Equity
Long-term Liabilities
Long-term debt
Total Long-term
Liabilities
Current Liabilities
Accounts Payable
Short-term Debt
Total Current
Liabilities
Total Liabilities
Total Liabilities and
Stockholders’ Equity
1,250,000
997,600
2,247,600
2,200,000
2,200,000
502,400
1,000,000
1,502,400
3,702,400
5,950,000
1,250,000
600,000
1,850,000
1,150,000
1,150,000
450,000
900,000
1,350,000
2,500,000
4,350,000
Comparative Income Statement of “Alpha- Beta”
2018 2017
Sales
Cost of Goods Sold
Gross Profit
Selling and Administrative Expenses
Net Operating Income
Interest Expenses
Income Before Taxes
Tax
Net Income
5,000,000
(3,200,000)
1,800,000
(1,000,000)
800,000
(240,000)
560,000
(162,400)
397,600
3,000,000
(1,800,000)
1,200,000
(900,000)
300,000
(110,000)
190,000
(55,100)
134,900

Given answer from Cheggs expert for quick ratio: Quick Ratio (QR) = (Cash&Cash Equivalents + Current Receivables+Prepaid Expenses or (CA-Inventory)/CL where CA: Current Assets and CL: liabilities

Given answer from Cheggs expert for Days’ Sales in Inventory = (Ending Inventory * 365) / Cost of Goods Sold

Given answer from Cheggs expert for Operating cycle:

Operating Cycle = Days of Sales Inventory + Days of Sales Outstanding - Days payable outsatanding

My Questions:

1) For quick ratio calculation why weren't 'prepaid expenses' substructed, too?

2) I have the impression that the 'Operating cycle' was asked to be calculated not the 'net operating cycle'. Can you please help since all the formula used in the answer confused me? I did not find any reference for the formula day payable outstanding and the average inventory can be found only for year 2018....

3) Can 'Days' sales in inventory' be calculated by using 'sales' instead of CoGs? (that was our tutor's suggestion)

In: Accounting

Where do you record a montly service charge and cheque printing charges on the Reconcilliation?

Where do you record a montly service charge and cheque printing charges on the Reconcilliation?

In: Accounting

Explain the usefulness of a flexible budget in specific business cases.: Explanation clearly details the usefulness...

Explain the usefulness of a flexible budget in specific business cases.: Explanation clearly details the usefulness of a flexible budget and why it provides more useful information than a static budget report.

In: Accounting

The following is the unadjusted trial balance for Panorama Resort Inc. at its year end, December...

The following is the unadjusted trial balance for Panorama Resort Inc. at its year end, December 31, 2018. The company adjusts its accounts annually.

Debit

Credit

Cash

$ 42,580

Accounts receivable

17,935

Supplies

12,980

Prepaid insurance

10,200

Land

85,000

Buildings

310,000

Accumulated depreciation—buildings

$ 62,000

Accounts payable

14,600

Unearned revenue

44,520

Note payable, due 2021

148,000

Common shares

80,000

Retained earnings

62,000

Rent revenue

Salaries expense

348,200

525,000

Utilities expense

39,395

Repairs and maintenance expense

21,560

Interest expense

7,850

Income tax expense

21,000

$874,120

$874,120

Additional information is provided below:

  1. A count of supplies on December 31st shows $4,150 of supplies on hand.
  2. The building has an estimated 20 year life with no residual value and straight-line depreciation is used.
  3. Salaries of $1,640 were unpaid on December 31st.
  4. Rental revenue for 5 nights at $150 per night during the last week of December has not been paid (received) or recorded.
  5. A two year insurance policy was purchased September 1, 2018.
  6. Income tax payable is estimated to be $1,920.
  7. Of the unearned revenue, it was determined that $28,500 remains unearned.
  8. Interest on the note payable is $785 per month and was last paid on October 31, 201
  9. The December utility bill of $3,380 has not year been recorded or paid.

REQUIRED:

Prepare all necessary adjusting journal entries for their year-end, December 31, 2018. Omit explanations but show calculations. Round all calculations to the nearest dollar.

In: Accounting

Should setting a transfer pricing rule differ between national and multinational companies?

Should setting a transfer pricing rule differ between national and multinational companies?

In: Accounting

Produce a direct materials budget with the following additional information. Units = 83,000 Direct material Cost...

Produce a direct materials budget with the following additional information.

Units = 83,000

Direct material Cost    Usage

Steel    $8.00/lb 12.100 oz/unit

Plastic    $3.50/lb 10.897 oz/unit

What is the total direct materials cost?

Note: lb = pound = 16 oz

In: Accounting

Ida Sidha Karya Company is a family-owned company located on the island of Bali in Indonesia....

Ida Sidha Karya Company is a family-owned company located on the island of Bali in Indonesia. The company produces a handcrafted Balinese musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $910. Selected data for the company’s operations last year follow: Units in beginning inventory 0 Units produced 300 Units sold 265 Units in ending inventory 35 Variable costs per unit: Direct materials $ 115 Direct labor $ 325 Variable manufacturing overhead $ 45 Variable selling and administrative $ 20 Fixed costs: Fixed manufacturing overhead $ 72,000 Fixed selling and administrative $ 34,000 The absorption costing income statement prepared by the company’s accountant for last year appears below: Sales $ 241,150 Cost of goods sold 192,125 Gross margin 49,025 Selling and administrative expense 39,300 Net operating income $ 9,725 Required: 1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. Prepare an income statement for last year using variable costing.

In: Accounting

On 31 October 2017 Jansen company signed a 2 year instalment note in the amount of...

On 31 October 2017 Jansen company signed a 2 year instalment note in the amount of 50.000 in conjunction with the purchase of the equipment. This note is payable in equal monthly instalments of 2.354 which include interest computed at annual rate of 12%. The first monthly payment is made on November 30,2017. This note is amortising over 24 months.
Complete amortisation table for the first 4 payments by entering the correct dollar amounts

In: Accounting