Berg Corporation is a service company that measures its output
by the number of customers served.
The company has provided the following fixed and variable cost
estimates that it uses for budgeting
purposes.
Fixed Element per Month
Variable Element per Customer Served
Revenue
$
4,200
Employee salaries and wages
$
58,800
$
900
Travel expenses
$
700
Other expenses
33,300
When the company prepared its planning budget at the beginning of
March, it assumed that 40
customers would have been served. The amount shown for "Employee
salaries and wages" in the
planning budget for March would have
been:
a. $91,200.
b. $94,800.
c. $92,600.
d. $102,889.
In: Accounting
(1) On August 1, 2018, We R Clean Company signed a 9-month contract with a hotel chain to provide pool and spa cleaning services for 3 hotel sites. The contract price of $14,850 was collected on the date the contract was signed. The services will be provided evenly over the next 9 months, starting on August 1. The adjusting entry on December 31, 2018 will
Credit Service Revenue for $6,600
Debit Earned Revenue for $6,600
Credit Service Revenue for 8,910
Debit Unearned Revenue for $8,250
(2) Collegiate Fitness Centers have 15,000 members whose monthly dues are $30 each. The company does not send individual bills to customers, who have until the 10th day of the month following the month of service to pay their monthly dues. On December 31, 2017, the company’s records show that 7,000 customers have already paid their December dues, and the payments were properly recorded. The adjusting entry to be recorded on December 31 will include
| A credit to Membership Revenue of $450,000 |
| A credit to Membership Revenue of $210,000 |
| A debit to Accounts Receivable of $210,000 |
|
A debit to Accounts Receivable of $240,000 (3) The Supplies account has a balance of $1,000 on January 1. During January, the company purchased $25,000 of Supplies on account. A count of Supplies at the end of January indicates a balance of $3,000. Which one of the following is a correct amount to be reported on the company's financial statements for the month ending January 31?
|
In: Accounting
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In: Accounting
Complete the following cost and revenue schedule
Average
Quantity Total Marginal Total Marginal Total
Price Demanded Revenue Revenue Cost Cost Cost
$20 0 $8
$18 1 $14
$16 2 $22
$14 3 $32
$12 4 $44
$10 5 $58
$8 6 $74
$6 7 $92
$4 8 $112
$2 9 $147
a. Graph the demand, MR, and MC curves.
b. At what rate of output are profits maximized within this range?
c. What are the values of MR and MC at the profit-maximizing rate of output?
d. What are total profits at that output rate?
e. If a competitive industry confronted the same demand and costs, how much output is produced in the short run?
f. What would happen to long-run price in perfect competition?
In: Economics
(2 pts) Accrual basis vs. basis – revenue and expense recognition: Suppose Capaldi Corp. provides travel services to customers and noted the following transactions for May 2018:
|
Transaction: |
Accrual basis revenue / (expense): |
Cash basis revenue / (expense): |
|
Provided services to customers for $2,920 in cash. |
$2,920 revenue |
$2,920 revenue |
|
Paid $6,000 in cash for June’s rent. |
||
|
Received $3,900 in cash from customers for services to be provided in June. |
||
|
Received bill from insurance company for May’s monthly premium of $2,000. Cash payment will be made on June 7th. |
||
|
Paid $600 in cash for utilities used in May. |
||
|
Paid workers $9,100 in cash for work performed in April. |
||
|
Received $8,100 in cash from customers for services provided in April on account. |
||
|
Issued common stock for $10,000 in cash. |
||
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Provided services to customers for $5,900 on account. Cash collections related to these services will not be received from customers until June. |
For each transaction, determine the amount of revenue or (expense), if any, that is recorded under accrual-basis accounting and under cash-basis accounting for May 2018. I have completed transaction a. for you as an example.
(2 pts) Accrual Based Accounting: Prepaid expenses – Depreciation of Fixed Assets. Moving On, Inc. purchases a new moving truck (e.g. ‘equipment’) for $56,000 on October 1st, 2017. At the time of its purchase, the truck is expected to be used in operations for 4 years and will have no resale or scrap value at the end of its life. Assume Moving On, Inc. uses straight-line depreciation (i.e. the asset depreciates evenly) over the expected life of the truck.
Record the journal entry for the original purchase of the truck that occurs on October 1st, 2017.
Record the adjusting entry to recognize Depreciation Expense on December 31, 2017.
What will the ending balance of the Accumulated Depreciation account be on December 31, 2018 (Assume the beginning balance of Accumulated Depreciation on January 1st, 2017 is $0 and Moving On, Inc. has no other assets that depreciate)?
What will the net book value of the truck be on December 31, 2018?
In: Accounting
Question: Ivanhoe Company's balance sheet at December 31, 2021, is presented below. Ivanhoe Company Balance...
During January 2022, the following transactions occurred.
Ivanhoe uses the perpetual inventory method.
| Jan. 1 | Ivanhoe accepted a 4-month, 8% note from Betheny Company in payment of Betheny’s $1,200 account. | |
| 3 | Ivanhoe wrote off as uncollectible the accounts of Walter Corporation ($500) and Drake Company ($300). | |
| 8 | Ivanhoe purchased $15,630 of inventory on account. | |
| 11 | Ivanhoe sold for $25,500 on account inventory that cost $17,210. | |
| 15 | Ivanhoe sold inventory that cost $730 to Jack Rice for $1,100. Rice charged this amount on his Visa First Bank card. The service fee charged Ivanhoe by First Bank is 3%. | |
| 17 | Ivanhoe collected $21,000 from customers on account. | |
| 21 | Ivanhoe paid $17,380 on accounts payable. | |
| 24 | Ivanhoe received payment in full ($300) from Drake Company on the account written off on January 3. | |
| 27 | Ivanhoe purchased advertising supplies for $1,420 cash. | |
| 31 | Ivanhoe paid other operating expenses, $3,280. |
In: Accounting
The comparative balance sheets for 2018 and 2017 and the statement of income for 2018 are given below for Dux Company. Additional information from Dux’s accounting records is provided also.
DUX COMPANY Comparative Balance Sheets December 31, 2018 and 2017 ($ in 000s) 2018 2017
Assets Cash $ 57 $ 32
Accounts receivable 56 71
Less: Allowance for uncollectible accounts (5 ) (4 )
Dividends receivable 5 3
Inventory 79 62
Long-term investment 39 22
Land 123 64
Buildings and equipment 213 274
Less: Accumulated depreciation (37 ) (74 )
$ 530 $ 450
Liabilities
Accounts payable $ 25 $ 44
Salaries payable 5 6
Interest payable 7 4
Income tax payable 19 22
Notes payable 59 0
Bonds payable 119 82
Less: Discount on bonds (14 ) (27 )
Shareholders' Equity Common stock 222 212
Paid-in capital—excess of par 36 32
Retained earnings 67 75
Less: Treasury stock (15 ) 0
$ 530 $ 450
DUX COMPANY Income Statement For Year Ended December 31, 2018 ($ in 000s)
Revenues
Sales revenue $ 310
Dividend revenue 7
$ 317
Expenses
Cost of goods sold 132
Salaries expense 37
Depreciation expense 29
Bad debt expense 1
Interest expense 20
Loss on sale of building 7
Income tax expense 29
255
Net income $ 62
Additional information from the accounting records: A building that originally cost $88,000, and which was three-fourths depreciated, was sold for $15,000.
The common stock of Byrd Corporation was purchased for $17,000 as a long-term investment.
Property was acquired by issuing a 12%, seven-year, $59,000 note payable to the seller.
New equipment was purchased for $27,000 cash. On January 1, 2018, bonds were sold at their $37,000 face value.
On January 19, Dux issued a 3% stock dividend (1,000 shares). The market price of the $10 par value common stock was $14 per share at that time.
Cash dividends of $56,000 were paid to shareholders.
On November 30,000 shares of common stock were repurchased as treasury stock at a cost of $15,000.
Required: Prepare the statement of cash flows for Dux Company using the indirect method. (Do not round intermediate calculations. Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands. (i.e., 10,000 should be entered as 10).))
In: Accounting
The Red Hen company is launching its new food for sale in supermarkets throughout Michigan. The sales department is convinced that its spicy chicken soup will be a great success. The marketing department is considering an intensive advertising campaign. The advertising campaign will cost $2,000,000 and if successful produce $9,600,000 in added revenue. If the campaign is less successful (25% chance), the added revenue is estimated at only $3,600,000. If no advertising is used, the revenue is estimated at $7,000,000 with probability 0.7 if customers are receptive and $3,000,000 with probability 0.3 if they are not.
Question- Should Red Hen invest in an intensive advertising campaign?
In: Operations Management
A shoe salesman wants to see if his female customers have a preference in the color of shoe purchased. He notes the color preferences of 100 randomly selected customers. The results: Black=32, Brown=27, Red=15, Navy =13 White =13
In: Math
You have recently been hired as the assistant controller for Stanton Temperton Corporation, which rents building space in major metropolitan areas. Customers are required to pay six months of rent in advance. At the end of 2018, the company's president, Jim Temperton, notices that net income has fallen compared to last year. In 2017, the company reported before-tax profit of $330,000, but in 2018 the before-tax profit is only $280,000. This concerns Jim for two reasons. First, his year-end bonus is tied directly to before-tax profits. Second, shareholders may see a decline in profitability as a weakness in the company and begin to sell their stock. With the sell-off of stock, Jim's personal investment in the company's stock, as well as his company-operated retirement plan, will be in jeopardy of severe losses. After close inspection of the financial statements, Jim notices that the balance of the Deferred Revenue account is $120,000. This amount represents payments in advance from long-term customers ($80,000) and from relatively new customers ($40,000). Jim comes to you, the company's accountant, and suggests that the firm should recognize as revenue in 2018 the $80,000 received in advance from long-term customers. He offers the following explanation: “First, we have received these customers' cash by the end of 2018, so there is no question about their ability to pay. Second, we have a long-term history of fulfilling our obligation to these customers. We have always stood by our commitments to our customers and we always will. We earned that money when we got them to sign the six-month contract.” Required: Discuss the ethical dilemma you face. What is the issue? Who are the parties affected? What factors should you consider in making your decision? Your answer must specifically state what principle or concept may be violated.
In: Accounting