Of Sharpe's sales,
30
percent is for cash, another
40
percent is collected in the month following the sales, and
30
percent is collected in the second month following sales. November and December sales for 2018 were
$250,000
and
$205,000,
respectively.Sharpe purchases its raw materials 2 months in advance of its sales. The purchases are equal to
60
percent of the final sales price of Sharpe's products. The supplier is paid 1 month after it makes a delivery. For example, purchases for April sales are made in February, and payment is made in March.In addition, Sharpe pays
$8,000
per month for rent and
$15,000
each month for other expenditures. Tax prepayments of
$20,000
are made each quarter, beginning in March. The company's cash balance on December 31, 2018, was
$24,000.
This is the minimum balance the firm wants to maintain. Any borrowing that is needed to maintain this minimum is paid off in the subsequent month if there is sufficient cash. Interest on short-term loans (12 percent) is paid monthly. Borrowing to meet estimated monthly cash needs takes place at the beginning of the month. Thus, if in the month of April the firm expects to have a need for an additional $60,500, these funds would be borrowed at the beginning of April with interest of $605
(0.12×1/12×$60,500)
owed for April and paid at the beginning of May.
a. Prepare a cash budget for Sharpe covering the first 7 months of 2019.
b. Sharpe has $200,000 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have ample cash to repay the notes?
a. Prepare a cash budget for Sharpe covering the first 7 months of 2019.
Fill in the Collections for the month of January: (Round to the nearest dollar.)
|
Nov |
Dec |
Jan |
Feb |
Mar |
Apr |
May |
June |
July |
|
|
Sales |
$250,000 |
$205,000 |
$220,000 |
$150,000 |
$165,000 |
$270,000 |
$330,000 |
$300,000 |
$255,000 |
|
Collections: |
|||||||||
| Month of sale
(30%) |
nothing |
||||||||
| First month
(40%) |
nothing |
||||||||
| Second month
(30%) |
nothing |
||||||||
|
Total Collections |
$nothing |
In: Finance
Barretta Ltd is a manufacturer of racing powerboats. It has
designed a new racing boat called the Powerline 3 and expects to
produce it in a continuous operation over an 18 month period.
During this period, it is expected that a total of sixteen
Powerline 3’s will be produced and sold. The production of the boat
is a labour intensive operation and units are produced one after
another.
The costs of producing the first boat are as follows: Skilled
Labour – 1,200 hours at a rate of £40 per hour Unskilled Labour –
1,800 hours at a rate of £30 per hour Materials – £75,000 Overheads
– £30 per labour hour worked (total of Skilled and Unskilled)
It is known that in producing any product, Skilled Labour usage
experiences an 80% learning curve effect and Unskilled Labour usage
experiences a 90% learning curve effect.
Baretta Ltd has decided to set the selling price per unit of the
Powerline 3 by using the full cost plus method of pricing, with a
profit mark up of 30%
Required: (a) Calculate the minimum selling price of
(i) the first unit of the Powerline 3. (ii) the second unit of the Powerline 3 (iii) the first 16 units of the Powerline 3 if ordered together
(b) Identify the method of setting the selling price that Champions
Ltd has chosen. Explain how the learning curve model will affect
the calculations for that selling price.
(c) Barretta Ltd Ltd also produce a further powerboat Ripper, which
has been in production for a number of years, and to date 492 units
of Ripper have been produced. The budget for the next quarter is
showing the production of 75 units of Ripper. If the 1st ever unit
took 900 hours and an 80% learning curve applies, calculate.
(i) the total labours hours needed for the production of the 75
units of Ripper.
(ii) the average labour time per unit
(iii) explain where this information may be used by Barretta Ltd
Ltd
Note: the learning co-efficient of 80% is -0.322
In: Accounting
|
Westin Watercraft’s predetermined overhead rate for year 2011 is 200% of direct labor. Information on the company’s production activities during May 2011 follows. |
| a. | Purchased raw materials on credit, $260,000. |
| b. | Paid $129,800 cash for factory wages. |
| c. | Paid $15,750 cash to a computer consultant to reprogram factory equipment. |
| d. | Materials requisitions record use of the following materials for the month. |
| Job 136 | $ | 49,000 | |
| Job 137 | 33,500 | ||
| Job 138 | 20,000 | ||
| Job 139 | 23,000 | ||
| Job 140 | 7,000 | ||
| Total direct materials | 132,500 | ||
| Indirect materials | 20,000 | ||
| Total materials used | $ | 152,500 | |
| e. | Time tickets record use of the following labor for the month. |
| Job 136 | $ | 12,100 | |
| Job 137 | 10,800 | ||
| Job 138 | 37,700 | ||
| Job 139 | 39,200 | ||
| Job 140 | 3,000 | ||
| Total direct labor | 102,800 | ||
| Indirect labor | 27,000 | ||
| Total | $ | 129,800 | |
| f. | Applied overhead to Jobs 136, 138, and 139. |
| g. | Transferred Jobs 136, 138, and 139 to Finished Goods. |
| h. | Sold Jobs 136 and 138 on credit at a total price of $530,000. |
| i. |
The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance). |
| Depreciation of factory building | $ | 69,500 | |
| Depreciation of factory equipment | 37,500 | ||
| Expired factory insurance | 11,000 | ||
| Accrued property tax payable | 35,500 | ||
| j. |
Applied overhead at month-end to the Goods in Process (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost. |
25.
Required information
| Required: | |
| 1. |
Prepare a job cost sheet for each job worked on during the month. (Omit the "$" sign in your response.) |
| Job No. 136 | Job No. 137 | Job No. 138 | Job No. 139 | Job No. 140 | |
| Materials | $ | $ | $ | $ | $ |
| Labor | |||||
| Overhead | |||||
| Total cost | $ | $ | $ | $ | $ |
26.
Required information
| 2. |
Prepare journal entries to record the events and transactions a through j. (Omit the "$" sign in your response. ) |
| General Journal | Debit | Credit | |
| a. | (Click to select)Factory payrollFinished goods inventoryAccounts payableRaw materials inventoryFactory overheadAccounts receivableCost of goods soldCash | ||
| (Click to select)Cost of goods soldCashFactory overheadFactory payrollRaw materials inventoryAccounts payableAccounts receivableFinished goods inventory | |||
| b. | (Click to select)Accounts receivableAccounts payableCashGoods in process inventoryFactory payrollFinished goods inventoryFactory overheadSales | ||
| (Click to select)Finished goods inventoryCashGoods in process inventoryFactory payrollSalesAccounts receivableAccounts payableFactory overhead | |||
| c. | (Click to select)Prepaid insuranceProperty taxes payableGoods in process inventoryRaw materials inventoryFactory payrollFactory overheadAccounts receivableCash | ||
| (Click to select)CashProperty taxes payableAccounts receivablePrepaid insuranceFactory payrollGoods in process inventoryFactory overheadRaw materials inventory | |||
| d. | (Click to select)Property taxes payableRaw materials inventoryFactory payrollAccounts payableCashFactory overheadGoods in process inventoryCost of goods sold | ||
| (Click to select)Factory payrollFactory overheadProperty taxes payableRaw materials inventoryGoods in process inventoryCashCost of goods soldAccounts payable | |||
| (Click to select)Property taxes payableRaw materials inventoryFactory payrollGoods in process inventoryAccounts payableCashCost of goods soldFactory overhead | |||
| e. | (Click to select)Factory overheadRaw materials inventoryGoods in process inventoryCost of goods soldProperty taxes payablePrepaid insuranceFactory payrollFinished goods inventory | ||
| (Click to select)Factory payrollFinished goods inventoryCost of goods soldRaw materials inventoryProperty taxes payableFactory overheadPrepaid insuranceGoods in process inventory | |||
| (Click to select)Finished goods inventoryFactory payrollGoods in process inventoryFactory overheadProperty taxes payablePrepaid insuranceCost of goods soldRaw materials inventory | |||
| f. | (Click to select)Cost of goods soldGoods in process inventoryFactory payrollFinished goods inventoryFactory overheadPrepaid insuranceSalesRaw materials inventory | ||
| (Click to select)Prepaid insuranceGoods in process inventoryFinished goods inventoryFactory payrollRaw materials inventorySalesCost of goods soldFactory overhead | |||
| g. | (Click to select)Property taxes payableFactory payrollFactory overheadGoods in process inventoryCost of goods soldAccounts receivablePrepaid insuranceFinished goods inventory | ||
| (Click to select)Prepaid insuranceFactory PayrollFinished goods inventoryProperty taxes payableFactory overheadCost of goods soldGoods in process inventoryAccounts receivable | |||
| h. | (Click to select)Prepaid insuranceGoods in process inventorySalesFinished goods inventoryFactory overheadFactory payrollAccounts receivableCost of goods sold | ||
| (Click to select)Factory payrollFactory overheadGoods in process inventoryCost of goods soldSalesFinished goods inventoryAccounts receivablePrepaid insurance | |||
| (Click to select)Raw materials inventoryFactory overheadCost of goods soldSalesCashFinished goods inventoryAccounts receivableFactory payroll | |||
| (Click to select)SalesCashRaw materials inventoryFactory payrollAccounts receivableFactory overheadFinished goods inventoryCost of goods sold | |||
| i. | (Click to select)Property taxes payablePrepaid insuranceAccum. depreciation-factory buildingSalesAccum. Depreciation-factory equipmentFactory overheadGoods in process inventoryCost of goods sold | ||
| (Click to select)Accum. depreciation-factory buildingAccum. depreciation-factory equipmentGoods in process inventoryFactory overheadProperty taxes payablePrepaid insuranceSalesCost of goods sold | |||
| (Click to select)Factory overheadAccum. depreciation-factory equipmentPrepaid insuranceAccum. depreciation-factory buildingProperty taxes payableGoods in process inventoryCost of goods soldSales | |||
| (Click to select)Accum. depreciation-factory buildingPrepaid insuranceProperty taxes payableCost of goods soldGoods in process inventorySalesFactory overheadAccum. depreciation-factory equipment | |||
| (Click to select)Prepaid insuranceAccum. depreciation-factory buildingProperty taxes payableGoods in process inventorySalesFactory overheadCost of goods soldAccum. depreciation-factory equipment | |||
| j. | (Click to select)Accounts receivableSalesGoods in process inventoryCashFinished goods inventoryFactory overheadFactory payrollRaw materials inventory | ||
| (Click to select)CashRaw materials inventoryFinished goods inventoryGoods in process inventoryAccounts receivableSalesFactory payrollFactory overhead | |||
27.
Required information
| 4. |
Prepare a report showing the total cost of each job in process and prove that the sum of their costs equals the Goods in Process Inventory account balance. Prepare similar reports for Finished Goods Inventory and Cost of Goods Sold. (Omit the "$" sign in your response.) |
| Reports of Job Costs | |
| Goods in Process Inventory | |
| (Click to select)Job 138Job 137Job 136Job 139 | $ |
| (Click to select)Job 140Job 138Job 139Job 136Job 137 | |
| Balance | $ |
| Finished Goods Inventory | |
| (Click to select)Job 140Job 139Job 137Job 138Job 136 | $ |
| Balance | $ |
| Cost of Goods Sold | |
| (Click to select)Job 136Job 140Job 137Job 139 | $ |
| (Click to select)Job 136Job 139Job 137Job 140Job 138 | |
| Balance | $ |
In: Accounting
Consider the following long-run model: Real GDP (Y) = 2,000; Consumption (C) = 300 + 0.6 (Y-T); Investment (I) = 500 -30r where r is the real interest rate; Taxes (T) = 450; Government spending (G) = 400. i. Compute consumption, private savings, public savings, national savings, investment and the real interest rate.
In: Economics
In: Accounting
You know that Y = C+I+G+(X-M)
An example of an increase in G that was used by the U.S. Federal
Government to fix the 2008 Great Recession is
Select one:
a. Increase in unemployment insurance benefits
b. Increase in interest payments on govt debt
c. Increase in social security benefits
d. Increase in spending on “shovel ready projects” by President Obama
In: Economics
Which of the following is correct? a. An increase in the money supply causes the interest rate to decrease so that aggregate demand shifts right. b. An increase in stock prices reduces consumption spending so that aggregate demand shifts left c. A recession in other countries reduces U.S. net exports so that U.S. aggregate demand shifts left. d. All of the above are correct.
In: Economics
A marketing researcher wants to estimate the mean amount spent ($) on a certain retail website by members of the website's premium program. A random sample of94members of the website's premium program who recently made a purchase on the website yielded a mean of$1700and a standard deviation of$250
a. Construct a 99%confidence interval estimate for the mean spending for all shoppers who are members of the website's premium program.
In: Statistics and Probability
A marketing researcher wants to estimate the mean amount spent ($) on a certain retail website by members of the website's premium program. A random sample of94members of the website's premium program who recently made a purchase on the website yielded a mean of$1700and a standard deviation of$250
a. Construct a 99%confidence interval estimate for the mean spending for all shoppers who are members of the website's premium program.
In: Statistics and Probability
Given the following:
Y= C + I + G.
C= 50 + 0.8Yd
I= 160
G= 150, T = 200
In: Economics