References

eBook & Resources

The budget for the Manchester University Printing Company for 20X1 ​follows:

LOADING...

​(Click the icon to view the budget​ data.)

Edith Gable​, the sales​ manager, has placed a £24,000 bid on a particularly large order with a cost of £5,800 direct material and £6,200 direct labor. The customer informs her that she can have the business for £19,500​, take it or leave it. If GableGable accepts the​ order, total sales for 20X1 will be £1,110,450. Gable refuses the​ order, saying,​ "I sell on a​ cost-plus basis. It is bad policy to accept orders at below cost. I would lose £560 on the​ job."

Requirements

Requirement 1. Begin by computing the operating income without the​ order, then just the​ order, and finally with the order. ​(For amounts with a​ $0 balance, make sure to enter​ "0" in the appropriate​ cell.)

Requirement 2. Give a short description of a​ contribution-margin technique to pricing that Gable might follow to achieve a price of £24,000 on the order. The contribution approach essentially provides a measure of the decrease in immediate ______ that would result from rejecting an order. This is the ________  by rejecting the order. Traditional approaches to pricing__________

The pricing formula that Gable should routinely use if she hopes to achieve a price of £24,000 on the​ order:

1. Pearl Company began operations on January 2, 2016. It employs 9 individuals who work 8-hour days and are paid hourly. Each employee earns 9 paid vacation days and 7 paid sick days annually. Vacation days may be taken after January 15 of the year following the year in which they are earned. Sick days may be taken as soon as they are earned; unused sick days accumulate. Additional information is as follows.

Pearl Company has chosen to accrue the cost of compensated absences at rates of pay in effect during the period when earned and to accrue sick pay when earned.

a) prepare journal entries to record transactions related to compensated absences during 2016 and 2017

b) Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2016 and 2017.

2. Cullumber Company sells televisions at an average price of $879 and also offers to each customer a separate 3-year warranty contract for $93 that requires the company to perform periodic services and to replace defective parts. During 2017, the company sold 294 televisions and 204 warranty contracts for cash. It estimates the 3-year warranty costs as $21 for parts and $31 for labor, and accounts for warranties separately. Assume sales occurred on December 31, 2017, and straight-line recognition of warranty revenues occurs.

a) Record any necessary journal entries in 2017.

b) What liability relative to these transactions would appear on the December 31, 2017, balance sheet and how would it be classified?

c) In 2018, Cullumber Company incurred actual costs relative to 2017 television warranty sales of $1,920 for parts and $3,960 for labor.

Record any necessary journal entries in 2018 relative to 2017 television warranties. Use "Inventory" account to record the warranty expense.

d) What amounts relative to the 2017 television warranties would appear on the December 31, 2018, balance sheet and how would they be classified?

QUESTION TWO

1. Use ONE MAIN accounting concept from the framework of accounting to provide acceptable solutions to the following accounting problems

1. The accountant is not sure as to whether to include cash received from a transaction in the income statement or the cash book

2. The managers wish to assess the effectiveness of its standard costing system

3. The directors are doubting the professional acumen of the staff in the valuation department of the firm

4. It is not clear whether to include some assets in the income statement or the statement of financial position

5. The accountant of a cash-based business wishes to save on cost by relying solely on the cash book and ignoring other ledger accounts                                                               [10 Marks]

2. Accounting is increasingly becoming irrelevant in modern business practice and business schools should shift focus to other more useful areas of management processes. Do you agree with this sentiment? Elaborate [4 Marks]

c) Evaluate the accounting standard setting process used by the International Accounting Standards Board                                                                                                                                   [6 Marks]

Ranking Investment Proposals: Payback Period, Accounting Rate of Return, and Net Present Value
Presented is information pertaining to the cash flows of three mutually exclusive investment proposals:

(a) Select the best investment proposal using the payback period, the accounting rate of return on initial investment, and the net present value criteria. Assume that the organization's cost of capital is 10 percent.

• Round accounting rate of return four decimal places.

• Round net present value to the nearest whole number.

• Use negative signs with your answers, when appropriate.

(b) Factors explaining the differences in rankings include all of the following except:

Net present value considers the timing of cash flows while payback considers only total cash flows.

The net present value method considers the cost of capital while the payback method does not discount future cash flows.

The accounting rate of return considers profitability while payback only considers the time required to recover the investment.

While the accounting rate of return explicitly considers the cost of the asset as part of annual depreciation the net present value method considers the cost of the asset as part of the initial investment.

** JUST NEED THE ACCOUNTING RATE OF RETURN - IT IS NOT 50%

Cloud Productivity Inc. uses flexible budgets that are based on the following data:

Prepare a flexible selling and administrative expenses budget for March for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 5 as a model.)

Please show work for each step.

Schedule of Cash Receipts

Rosita Flores owns Rosita's Mexican Restaurant in Tempe, Arizona. Rosita's is an affordable restaurant near campus and several hotels. Rosita accepts cash and checks. Checks are deposited immediately. The bank charges $0.60 per check; the amount per check averages $75. “Bad” checks that Rosita cannot collect make up 4 percent of check revenue.

During a typical month, Rosita's has sales of $49,000. About 80 percent are cash sales. Estimated sales for the next three months are as follows:

Required:

Prepare a schedule of cash receipts for May and June. Round your intermediate computations and final answers to the nearest whole dollar.

A and B are equal partners in a personal services partnership. Each partner acquired her partnership interest for cash several years ago. None of the partnership’s assets is Section 704(c) property. The partnership has the following balance sheet:

Assets                                                                         Liabilities and Partners’ Capital

                        A.B.                 F.M.V.                                                 A.B.*               F.M.V.

Cash                $13,000           $12,000                       Liabilities:                               $2,000

Capital Assets:                                                                        Capital:

Collectibles     1,000               3,000                           A                      $10,000           15,000

Other               6,000               2,000                           B                      10,000             15,000

Subtotal          7,000               5,000                                                                                      

Receivables     0                      14,000                                                                                    

Total                $20,000           $32,000                                               $20,000           $32,000

Consider the tax consequences to B on her sale in each of the following alternative situations:

1. B sells her interest for $15,000 cash
2. B sells her interest for $16,000 cash and under the partnership agreement all gain from the sale of the collectibles is allocated to B
3. Same as (a), above, except that the collectibles have a basis of $3,000 and a fair market value of $1,000, and the other capital asset has a basis of $4,000 and a fair market value of $4,000.

Statement of cost of goods manufactured for a manufacturing company Cost data for Johnstone Manufacturing Company for the month ended March 31 are as follows: Inventories March 1 March 31 Materials $236,400 $217,370 Work in process 490,700 574,550 Finished goods 659,900 693,310 Direct labor $3,940,000 Materials purchased during March 3,001,370 Factory overhead incurred during March: Indirect labor 360,220 Machinery depreciation 236,400 Heat, light, and power 197,000 Supplies 39,280 Property taxes 33,770 Miscellaneous costs 51,450 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Prepare a cost of goods manufactured statement for March. Round your answers to the nearest dollar. Johnstone Manufacturing Company Statement of Cost of Goods Manufactured For the Month Ended March 31 $ Direct materials: $ $ $ Factory overhead: $ Total factory overhead Total manufacturing costs incurred during March Total manufacturing costs $ Cost of goods manufactured $ Determine the cost of goods sold for March. Round your answer to the nearest dollar.

At the beginning of the school year, Priscilla Wescott decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget:

a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except cash decrease which should be indicated with a minus sign.

b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?

c. What are the budget implications for Priscilla Wescott?

Priscilla can see that her present plan (will provide/will not provide?) sufficient cash. If Priscilla did not budget but went ahead with the original plan, she would be $________? (over/short?) at the end of December, with no time left to adjust.

Please prepare the following

A. An entry for the following transactions of Elirene Mosquera Automobile Shop for the month of October, 2020:

B. Prepare trial balance, income statement and balance sheet.

October 1 Elirene Mosquera invested P420,000 in the business.

4 Purchased shop supplies for cash, P3,000.

6 Purchased additional supplies, P3,000, and shop equipment, P2,500 on credit from Rio Feliciano Trading.

10 Repaired the cargo truck of Jet payapag, P5,600 and collected P3,200.

11 Paid Rio Feliciano Trading, P1,200 as partial settlement of the account due to it.

14 Repaired the stare car of Maileen Flores on credit, P12,000.

19 Paid 1/2 of the amount still due to Rio Feliciano Trading.

20 Bought additional supplies from Mahilom Trading, P10,000 in cash.

25 Rendered service to Erika Bernasol on credit amounting to P1,300.

27 Paid water bill for the month, P2,100.

29 Collected P500 from Erika Bernasol as partial settlement of the account.

30 Paid the remaining balance owed to Rio Feliciano.

31 Paid telephone bill for the month amounting to P3,000.

Project L costs $35,000, its expected cash inflows are $13,000 per year for 11 years, and its WACC is 14%. What is the project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.

Project L costs $65,631.23, its expected cash inflows are $13,000 per year for 11 years, and its WACC is 10%. What is the project's IRR? Round your answer to two decimal places.

Project L costs $75,000, its expected cash inflows are $9,000 per year for 8 years, and its WACC is 13%. What is the project's MIRR? Round your answer to two decimal places. Do not round your intermediate calculations.

Project L costs $60,000, its expected cash inflows are $15,000 per year for 9 years, and its WACC is 11%. What is the project's payback? Round your answer to two decimal places.

Project L costs $30,000, its expected cash inflows are $8,000 per year for 8 years, and its WACC is 10%. What is the project's discounted payback? Round your answer to two decimal places.

1. Dividends on Preferred and Common Stock

   Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: Year 1, $48,000; Year 2, $96,000; Year 3, $216,000; Year 4, $264,000; Year 5, $348,000; and Year 6, $432,000. During the entire period ended December 31 of each year, the outstanding stock of the company was composed of 30,000 shares of cumulative preferred 4% stock, $100 par, and 100,000 shares of common stock, $5 par.

   Required:

   1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears at the beginning of Year 1. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0".

   						Preferred Dividends								Common Dividends
   Year		Total Dividends				Total				Per Share				Total				Per Share
   Year 1		$   48,000				$				$				$				$
   Year 2		96,000
   Year 3		216,000
   Year 4		264,000
   Year 5		348,000
   Year 6		432,000
   										$								$

   2. Determine the average annual dividend per share for each class of stock for the six-year period. If required, round your answers to two decimal places.

   Average annual dividend for preferred	$ per share
   Average annual dividend for common	$ per share

   3. Assuming a market price per share of $204 for the preferred stock and $9 for the common stock, determine the average annual percentage return on initial shareholders' investment, based on the average annual dividend per share for preferred stock and for common stock.

   Round your answers to two decimal places.

   Preferred stock	%
   Common stock	%

Check My Work

Donnie Hilfiger has two classes of stock authorized: $1 par preferred and $0.01 par value common. As of the beginning of 2018, 300 shares of preferred stock and 4,000 shares of common stock have been issued. The following transactions affect stockholders’ equity during 2018:

March 1 Issue 1,100 shares of common stock for $42 per share.
May 15 Purchase 400 shares of treasury stock for $35 per share.
July 10 Reissue 200 shares of treasury stock purchased on May 15 for $40 per share.
October 15 Issue 200 shares of preferred stock for $45 per share.
December 1 Declare a cash dividend on both common and preferred stock of $0.50 per share to all stockholders of record on December 15. (Hint: Dividends are not paid on treasury stock.)
December 31 Pay the cash dividends declared on December 1.

Donnie Hilfiger has the following beginning balances in its stockholders’ equity accounts on January 1, 2018: Preferred Stock, $300; Common Stock, $40; Additional Paid-in Capital, $76,000; and Retained Earnings, $30,500. Net income for the year ended December 31, 2018, is $10,800.

Required:

1. Record each of these transactions.

(I need the most help on the Dividends and Dividends payable amounts from december 1st and december 30th)