Skysong Industries has the following patents on its December 31, 2019, balance sheet. Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A $44,268 3/1/16 17 years Patent B $17,040 7/1/17 10 years Patent C $22,560 9/1/18 4 years The following events occurred during the year ended December 31, 2020. 1. Research and development costs of $247,000 were incurred during the year. 2. Patent D was purchased on July 1 for $37,848. This patent has a useful life of 91/2 years. 3. As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent B’s value may have occurred at December 31, 2020. The controller for Skysong estimates the expected future cash flows from Patent B will be as follows. Year Expected Future Cash Flows 2021 $2,200 2022 2,200 2023 2,200 The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.) Click here to view factor tables Correct answer iconYour answer is correct. Compute the total carrying amount of Skysong’ patents on its December 31, 2019, balance sheet. Total carrying amount $enter the Total carrying amount in dollars 62106 eTextbook and Media New

attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect. Compute the total carrying amount of Skysong' patents on its December 31, 2020, balance sheet. Total carrying amount $enter the Total carrying amount in dollars

You have just been hired as a new accountant by Earrings Unlimited, a distributor of earrings to various retail outlets located in shopping malls across the country. In the past, the company has done very little in the way of budgeting and at certain times of the year has experienced a shortage of cash.

Because you are well trained in budgeting, you have decided to prepare a budget for the last quarter of the 2020 calendar year in order to show management the benefits that can be gained from an integrated budgeting program. The company sells many styles of earrings, but all are sold for the same price — R90 per pair. Actual sales of earrings for the last three months and budgeted sales for the next three months follow:

The company does not keep earrings in stock. All sales are on credit. The company has found that only

20% of a month’s sales are collected in the month of sale. An additional 60% is collected in the following month, and 15% is collected in the second month following sale. The remaining 5% is usually written off as irrecoverable in the third month following sale.

Suppliers are paid R36 for a pair of earrings. Eighty percent of a month’s purchases is paid for in the month of purchase; the remaining twenty percent is paid for in the following month. Monthly operating expenses for the company amount to R248 000 and comprise advertising, rent, salaries, utilities, insurance, machine depreciation and bad debts. Cash expenses are paid each month. The company uses a machinery that was acquired at a cost of R1 500 000 two years ago and is being depreciated at 20% per annum on cost using a straight-line method.

The company had a bank balance of R50 000 on 30 September 2020 in line with the minimum monthly cash balance that it retains. All borrowings are done at the beginning of a month; any repayments are made at the end of a month. The company has an agreement with the bank that allows the company to borrow in increments of R1 000. The interest rate on these loans is 15% per annum and is payable at the end of the quarter. The company would pay the bank as much of the loan as possible (in increments of R1 000, while still retaining at least R50 000 in cash).

REQUIRED

a) Prepare a monthly cash budget of Earrings Unlimited for each of the three-month period ending 31 December 2020. You do not need to show the total quarter.

Siren Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2020, the company incurred the following costs.

Siren Company sells the fishing lures for $34.00. During 2020, the company sold 81,000 lures and produced 95,000 lures.

Assuming the company uses variable costing, calculate Siren’s manufacturing cost per unit for 2020. (Round answer to 2 decimal places, e.g. 10.50.)

1. Manufacturing cost per unit $
2. Prepare a variable costing income statement for 2020.

Exercise 6-17

Siren Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2020, the company incurred the following costs.

Siren Company sells the fishing lures for $26.00. During 2020, the company sold 80,000 lures and produced 94,000 lures.

Prepare a variable costing income statement for 2020.

Prepare an absorption costing income statement for 2020.

Using the company Google to answer this questions:

.WHAT ARE THE MAJOR ELEMENTS OF A STRONG CULTURE ?

• WHAT ARE COMMON FEATURES OF HIGHLY INNOVATIVE ORGANIZATIONS ?

• USING THE “ RESEARCH INSIGHT “ON: " CEO VALUES, CULTURE, & ASPECTS OF PERFORMANCE “

Strategy Exercise: Read the following vignette and develop some suggestions for the company based on the material you read in this chapter.

Twisted is a small company with big dreams. The shopping mall-oriented hot pretzel company has successfully grown its revenues by a rate of 10 percent annually over the last 10 years. Twisted wants to sustain its growth rate in the years ahead. The company has traditionally hired new store managers from outside of the company. However, in the last few years, it has had a difficult time recruiting enough of these people. The CEO feels that there are probably a large number of employees who might make good managers. However, the company has no good internal assessment systems in place to identify them. The CEO asks your group to help the firm identify internal managerial talent so it can continue to pursue its growth strategy. What methods would you suggest for doing so?

14.       Cleaverland purchased 100% of Omaha on January 1, 2019 for $650,000. On that date, Omaha's stockholders' equity was $650,000, and the recognized book values of Ottowa’s individual net assets approximated their fair values. Omaha had net incomes of $150,000 and $190,000 for 2019 and 2020, respectively. The subsidiary paid dividends amounting to $30,000 in both years. Cleaverland uses the equity method to account for its pre-consolidation investment in Omaha.

What was the balance in Equity Investment at December 31, 2020?

a. $650,000

b. $710,000

c. $990,000

d. $930,000

15.       Brendon, Inc. acquired 100% of Weston Enterprises on January 2, 2020. During 2020, Brendon sold Weston for $700,000 goods which had cost $500,000. Weston still owned 40% of the goods at the end of the year. In 2021, Brendon sold goods with a cost of $500,000 to Weston for $700,000, and the buyer still owned 40% of the goods at year-end. For 2021, cost of goods sold was $1,000,000 for Brendon and $990,000 for Weston.

What was consolidated cost of goods sold for 2021?

a.   $1,370,000

b.   $1,290,000

c.   $1,870,000

d.   $1,990,000

Clearwater Co. owned all of the voting common stock of Kelley, Inc. On January 2, 2020 Clearwater sold equipment to Kelley for $350,000. The equipment had cost Clearwater $425,000. At the time of the sale, the balance in accumulated depreciation was $125,000. The equipment had a remaining useful life of eight years and no salvage value.

16.       For the consolidated balance sheet at December 31, 2021, at would amount would the equipment (net) be included?

a.   $225,000

b. $262,500

c.   $306,250

d. $-0-

On April 1, 2020, Republic Company sold equipment to its wholly owned subsidiary, Barre Corporation, for $40,000. At the time of the transfer, the asset had an original cost (to Republic) of $60,000 and accumulated depreciation of $25,000. The equipment has a five year estimated remaining life.Barre reported net income of $250,000, $270,000 and $310,000 in 2020, 2021, and 2022, respectively. Republic received dividends from Barre of $90,000, $105,000 and $120,000 for 2020, 2021, and 2022, respectively.

17.        What was the amount of the gain or loss on the sale of equipment reported by Republic on its pre-consolidation income statement in 2020?

a. $-0-

b. $ 5,000 gain

c.    $20,000 loss

d. $35,000 gain

18.       What was the amount of the credit to depreciation expense on the 2021 consolidation worksheet?

a. $   750

b.   $-0-

c.   $1,000

d.   $1,600