You have just been advised that your organization is opening an office in Québec. Describe the employer contributions that are specific to the province of Québec, their rates and thresholds where available. (Do not include the organization’s portion of the statutory deductions.)
In: Accounting
Firm B, a calendar year, cash basis taxpayer, leases lawn and
garden equipment. During December, it received the following cash
payments. To what extent does each payment represent current
taxable income to Firm B?
In: Accounting
(LO 3) A company uses activity-based costing to determine the
costs of its three products: A, B, and C. The budgeted cost and
activity for each of the company's three activity cost pools are
shown in the following table:
Budgeted Activity | ||||||||||||
Activity Cost Pool | Budgeted Cost | Product A | Product B | Product C | ||||||||
Activity 1 | $ | 89,000 | 7,900 | 10,900 | 21,900 | |||||||
Activity 2 | $ | 64,000 | 8,900 | 16,900 | 9,900 | |||||||
Activity 3 | $ | 120,000 | 4,400 | 2,900 | 3,525 | |||||||
How much overhead will be assigned to Product B using
activity-based costing?
In: Accounting
The following data were drawn from the records of Benson Corporation.
Planned volume for year (static budget) | 3,800 | units | |||||
Standard direct materials cost per unit | 2.70 | pounds | @ | $ | 1.50 | per pound | |
Standard direct labor cost per unit | 2.50 | hours | @ | $ | 3.80 | per hour | |
Total expected fixed overhead costs | $ | 14,440 | |||||
Actual volume for the year (flexible budget) | 4,000 | units | |||||
Actual direct materials cost per unit | 2.40 | pounds | @ | $ | 2.10 | per pound | |
Actual direct labor cost per unit | 2.80 | hours | @ | $ | 3.30 | per hour | |
Total actual fixed overhead costs | $ | 10,240 | |||||
In: Accounting
Nash Inc. began operations in January 2015 and reported the following results for each of its 3 years of operations.
2015 $ 260,000 net loss
2016 $ 37,000 net loss
2017 $ 819,000 net income
At December 31, 2017, Nash Inc. capital accounts were as follows.
7% cumulative preferred stock, par value $100; authorized, issued, and outstanding 4,700 shares $ 470,000 Common stock, par value $1.00; authorized 1,000,000 shares; issued and outstanding 818,000 shares $ 818,000 Nash Inc. has never paid a cash or stock dividend. There has been no change in the capital accounts since Nash began operations. The state law permits dividends only from retained earnings.
(a) Compute the book value of the common stock at December 31, 2017.
(b) Compute the book value of the common stock at
December 31, 2017, assuming that the preferred stock has a
liquidating value of $ 108 per share.
In: Accounting
Umbrella Corporation maintains computer equipment and provides consulting services in 10 states and 15 countries. The corporation has a fleet of 4 Corporate jets and 3 Helicoptors and employs 6 full time pilots who receive salary and benefits. The most appropriate way to allocate the total cost of the corporate jets, helicopters, and pilots to individual user departments who travel worldwide to provide consulting service to clients would be:
a. number of employees in each department
b. number of trips taken by each department
c. number of miles flown by each department
d. sales revenue generated by each user department.
Comments:
- Can you explain why Answer C would be the correct answer? I would appreciate it.
- This is a created example that complies with Chegg's honor code.
In: Accounting
enCo has the following securities in its investment portfolio on December 31, 2014. All these securities were purchased in 2014.
In 2015, the following transactions occurred:
Prepare journal entries for the 2015 transactions and events. The company records dividends, interest income, amortization and holding gains (losses) separately to facilitate income tax preparation. Please make sure your final answer(s) are accurate to the nearest whole number. Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. January 15 would be 15/Jan).
In: Accounting
What is a package policy? Explain the advantages of a commercial package policy to a business firm as compared to the purchase of separate policies.
The business income (and extra expense) coverage form has a number of policy provisions. Explain the following provisions: Business income loss, Coverage of extra expenses
Define robbery, burglary, safe burglary, and theft.
Identify the major exclusions in the commercial crime coverage form (loss-sustained form).
In: Accounting
Question 2
Comparative Balance Sheet |
|||
Shiner Corporation |
|||
Assets |
Dec 31, 1996 |
Dec 31, 1995 |
|
Cash |
$37,000 |
$49,000 |
|
Accounts Receivable |
$26,000 |
$36,000 |
|
Prepaid Expenses |
$6,000 |
$0 |
|
Land |
$70,000 |
$0 |
|
Building |
$200,000 |
$0 |
|
Accumulated Depreciation |
$11,000 |
$189,000 |
$0 |
Equipment |
$68,000 |
$0 |
|
Accumulated Depreciation |
$10,000 |
$58,000 |
$0 |
Total Assets |
$386,000 |
$85,000 |
|
Liabilities and Stockholder Equity |
|||
Accounts Payable |
$40,000 |
$5,000 |
|
Bonds Payable |
$150,000 |
$0 |
|
Common Stock |
$60,000 |
$0 |
|
Retained Earnings |
$136,000 |
$20,000 |
|
Total Liabilities and Stockholder Equity |
$386,000 |
$85,000 |
Income Statement |
||
Shiner Corporation |
||
Revenue |
$492,000 |
|
Operating Expenses |
$269,000 |
|
Depreciation |
$21,000 |
$290,000 |
Income before Income Taxes |
$202,000 |
|
Income Tax Expense |
$68,000 |
|
Net Income |
$134,000 |
Additional information:
|
In: Accounting
Colonial Pharmaceuticals is a small firm specializing in new products. It is organized into two divisions, which are based on the products they produce. AC Division is smaller and the life of the products it produces tend to be shorter than those produced by the larger SO Division. Selected financial data for the past year is shown below. Divisional investment is as of the beginning of the year. Colonial Pharmaceuticals uses a 9 percent cost of capital and uses beginning-of-the-year investment when computing ROI and residual income. Ignore income taxes.
AC Division | SO Division | |||||
Allocated corp. overhead | $ | 645 | $ | 1,350 | ||
Cost of goods sold | 3,290 | 6,100 | ||||
Divisional investment | 9,900 | 75,500 | ||||
R&D | 2,450 | 3,150 | ||||
Sales | 9,800 | 15,500 | ||||
SG&A | 835 | 1,080 | ||||
Required:
a. Compute divisional income for the two divisions.
division income
ac division
so division
b. Calculate the operating margin, which is equivalent to the return on sales, for the two divisions. (Enter your answers as a percentage rounded to 2 decimal places (i.e., 32.16).)
operating margin
AC division %
SQ divison %
c. Calculate ROI for the two divisions. (Enter your answers as a percentage rounded to 2 decimal places (i.e., 32.16).)
Roi
AC divison %
So divison %
d. Compute residual income for the two divisions. (Negative amounts should be indicated by a minus sign.)
residual income for ac division So division
In: Accounting
On January 1, 2018, Rick’s Pawn Shop leased a truck from Chumley Motors for a six-year period with an option to extend the lease for three years. Rick’s had no significant economic incentive as of the beginning of the lease to exercise the 3-year extension option. Annual lease payments are $27,000 due on December 31 of each year, calculated by the lessor using a 4% discount rate. Assume that at the beginning of the third year, January 1, 2020, Rick’s had made significant improvements to the truck whose cost could be recovered only if it exercises the extension option, creating an expectation that extension of the lease was “reasonably certain.” The relevant interest rate at that time was 5%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry, if any, at the beginning of the third year for the lessee to account for the reassessment.
In: Accounting
5. For the Fourth of July, Ray (manager of Tucker’s Grocery) decided to try to sell some red, white and blue T-shirts with the Berryville logo and fireworks on them. Ray bought 100 of these T-shirts at $3.00 apiece and decided to sell them for $5.00 each. The shirts weren’t as popular as Ray had expected. By July 5, Ray had sold only 30 of the shirts. He decided to mark the shirts down to $4.00 apiece. By July 20, Ray sold 20 more shirts. He then marked the remainder of the shirts down to $3.00 each and sold the rest by July 30.
Part 1 - Please calculate the initial margin, markdown dollars, markdown percent, maintain margin dollars, and maintain margin percent for the T-shirts.
Part 2 – Based on the numbers found in Part 1, would you recommend Ray make a similar purchase next year? If Ray does decide to purchase the t-shirts again next year, would you recommend any changes to his pricing strategy? What and why?
In: Accounting
Andretti Company has a single product called a Dak. The company normally produces and sells 89,000 Daks each year at a selling price of $62 per unit. The company’s unit costs at this level of activity are given below:
Direct materials | $ | 7.50 | |
Direct labor | 11.00 | ||
Variable manufacturing overhead | 2.90 | ||
Fixed manufacturing overhead | 6.00 | ($534,000 total) | |
Variable selling expenses | 1.70 | ||
Fixed selling expenses | 4.00 | ($356,000 total) | |
Total cost per unit | $ | 33.10 | |
A number of questions relating to the production and sale of Daks follow. Each question is independent.
Required:
1-a. Assume that Andretti Company has sufficient capacity to produce 120,150 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 35% above the present 89,000 units each year if it were willing to increase the fixed selling expenses by $150,000. What is the financial advantage (disadvantage) of investing an additional $150,000 in fixed selling expenses?
1-b. Would the additional investment be justified?
2. Assume again that Andretti Company has sufficient capacity to produce 120,150 Daks each year. A customer in a foreign market wants to purchase 31,150 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $4.70 per unit and an additional $15,575 for permits and licenses. The only selling costs that would be associated with the order would be $2.10 per unit shipping cost. What is the break-even price per unit on this order?
3. The company has 900 Daks on hand that have some irregularities and are therefore considered to be "seconds." Due to the irregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What is the unit cost figure that is relevant for setting a minimum selling price?
4. Due to a strike in its supplier’s plant, Andretti Company is unable to purchase more material for the production of Daks. The strike is expected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for the two-month period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manufacturing overhead costs would continue at 35% of their normal level during the two-month period and the fixed selling expenses would be reduced by 20% during the two-month period.
a. How much total contribution margin will Andretti forgo if it closes the plant for two months?
b. How much total fixed cost will the company avoid if it closes the plant for two months?
c. What is the financial advantage (disadvantage) of closing the plant for the two-month period?
d. Should Andretti close the plant for two months?
5. An outside manufacturer has offered to produce 89,000 Daks and ship them directly to Andretti’s customers. If Andretti Company accepts this offer, the facilities that it uses to produce Daks would be idle; however, fixed manufacturing overhead costs would be reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two-thirds of their present amount. What is Andretti’s avoidable cost per unit that it should compare to the price quoted by the outside manufacturer?
Assume that Andretti Company has sufficient capacity to produce 120,150 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 35% above the present 89,000 units each year if it were willing to increase the fixed selling expenses by $150,000. What is the financial advantage (disadvantage) of investing an additional $150,000 in fixed selling expenses?
Show less
|
Assume again that Andretti Company has sufficient capacity to produce 120,150 Daks each year. A customer in a foreign market wants to purchase 31,150 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $4.70 per unit and an additional $15,575 for permits and licenses. The only selling costs that would be associated with the order would be $2.10 per unit shipping cost. What is the break-even price per unit on this order? (Round your answers to 2 decimal places.)
Show less
|
The company has 900 Daks on hand that have some irregularities and are therefore considered to be "seconds." Due to the irregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What is the unit cost figure that is relevant for setting a minimum selling price? (Round your answer to 2 decimal places.)
|
Due to a strike in its supplier’s plant, Andretti Company is
unable to purchase more material for the production of Daks. The
strike is expected to last for two months. Andretti Company has
enough material on hand to operate at 25% of normal levels for the
two-month period. As an alternative, Andretti could close its plant
down entirely for the two months. If the plant were closed, fixed
manufacturing overhead costs would continue at 35% of their normal
level during the two-month period and the fixed selling expenses
would be reduced by 20% during the two-month period. (Round number
of units produced to the nearest whole number. Round your
intermediate calculations and final answers to 2 decimal places.
Any losses/reductions should be indicated by a minus sign.)
a. How much total contribution margin will Andretti forgo if it
closes the plant for two months?
b. How much total fixed cost will the company avoid if it closes
the plant for two months?
c. What is the financial advantage (disadvantage) of closing the
plant for the two-month period?
Show less
|
Due to a strike in its supplier’s plant, Andretti Company is unable to purchase more material for the production of Daks. The strike is expected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for the two-month period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manufacturing overhead costs would continue at 35% of their normal level during the two-month period and the fixed selling expenses would be reduced by 20% during the two-month period. Should Andretti close the plant for two months?
Show less
An outside manufacturer has offered to produce 89,000 Daks and ship them directly to Andretti’s customers. If Andretti Company accepts this offer, the facilities that it uses to produce Daks would be idle; however, fixed manufacturing overhead costs would be reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two-thirds of their present amount. What is Andretti’s avoidable cost per unit that it should compare to the price quoted by the outside manufacturer? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Show less
|
In: Accounting
Elizabeth College, a small private college, had the following transactions in fiscal year 2017. |
1. |
Gross tuition and fees revenue totaled $5,600,000. Tuition waivers and scholarships of $346,000 were granted. Of the tuition waivers granted $276,400 was for teaching assistantships, which is an instruction expense. |
2. | Students received tuition refunds of $101,670. |
3. |
During the year the college received $1,891,000 cash in unrestricted private gifts, $575,200 cash in temporarily restricted grants, and $1,000,000 in securities for an endowment. |
4. |
A pledge campaign generated $1,090,000 in pledges. Of the amount pledged, $573,200 was for the capital construction campaign, $300,000 was for endowments, and the remainder of the pledges had no purpose restrictions. The pledges will all be collected in 2018. |
5. | Auxiliary enterprises provided goods and services that generated $94,370 in cash. |
6. | Collections of tuition receivable totaled $5,080,000. |
7. | Unrestricted cash of $1,000,000 was invested. |
8. | The college purchased computer equipment at a cost of $10,580. |
9. | During the year the following expenses were paid: |
Instruction | $ | 3,566,040 | |
Academic support | 1,987,000 | ||
Student services | 87,980 | ||
Institutional support | 501,130 | ||
Auxiliary enterprises | 92,410 | ||
10. | Instruction provided $450,000 in services related to the temporarily restricted grant recorded in transaction 3. |
11. |
At year-end, the allowance for uncollectible tuition and fees
was increased by $7,200. The fair value of investments had
increased $11,540; of this amount, $3,040 was allocated to
permanently restricted net assets, the remainder was allocated to
unrestricted net assets. Depreciation on plant |
12. | All nominal accounts were closed. |
a-1. |
Prepare journal entries to record the foregoing transactions for the fiscal year ended June 30, 2017. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) |
In: Accounting
The following are BAC Bhd.’s year end statement of financial
position and statement of profit and loss for 2016 and 2017:
2017 ($) 2016 ($)
Non Current Assets:
Gross Non Current assets 317,503 232,179
Less accumulated depreciation 54,045 34,187
Net Non Current assets 263,458 197,992
Current Assets:
ICLBAT/JANUARY2019
7
Cash and equivalents 208,323 102,024
Accounts receivable 690,294 824,979
Inventories 942,374 715,414
Total Current Aassets 1,840,991 1,642,417
Total Assets 2,104,449 1,840,409
Non Current Liabilities
Long term debt 410,769 372,931
Total Non Current Liabilities 410,769 372,931
Current Liabilites
Short term borrowings 288,798 296,149
Accounts payable 636,318 414,611
Accruals 106,748 103,362
Total Current Liabilities 1,031,864 814,122
Total Liabilities 1,442,633 1,187,053
Shareholders’ Equity
Common stock (100,000 shares) 550,000 550,000
Retained earnings 111,816 103,356
Total Shareholders’ Equity 661,816 653,356
Total Liabilities and Shareholders’ Equity 2,104,449
1,840,409
ICLBAT/JANUARY2019
8
2017 ($) 2016 ($)
Sales 2,325,967 2,220,607 (-) Cost of goods sold 1,869,326
1,655,827 Other expenses 287,663 273,870 Total operating costs
excluding depreciation and amortization 2,156,989 1,929,697
Depreciation and amortization 25,363 26,341 Total operating costs
2,182,352 1,956,038 EBIT 143,615 264,569 (-) Interest expense
31,422 13,802 EBT 112,193 250,767 (-) Taxes (30%) 33,658 75,230 Net
income 78,535 175,537
Related items:
2017 2016 Total dividends paid $70,075 $150,000 Stock price per
share $15.60 $21.80
Required:
(a) Calculate the after tax operating income (i.e. after-tax EBIT)
for 2016 and 2017.
(b) Calculate the net working capital (NWC) that is supported by
non-free sources for 2016 and 2017, and the changes in NWC between
these two years.
(c) What is free cash flow (FCF)? Calculate the FCF for 2017. Is a
negative FCF always a bad sign?
(d) Calculate the following for the company for 2017: (i) Earnings
per share (1 mark) (ii) Dividends per share (1 mark) (iii) Book
value per share (1 mark) (Total: 15 marks)
In: Accounting