wATER IS THE LIFEbLOOd OF THE EARTH, but by 2025, according to the United Nations, two-thirds of the world’s population could face chronic shortages of water. In fact, some countries are already importing huge supertank- ers of freshwater from other countries. But one place that’s definitely not short of water is the state of Michigan, which has 11,000 lakes and is surrounded by Lakes Michigan, Huron, Superior, and Erie. So it came as a surprise to some. that the Nestle? company’s new Ice Mountain bottled-water plant in Mecosta County, Michigan, dredged up so much con- troversy when it began pumping water from a local spring.81 Nestle?’s willingness to invest $100 million to build a new 410,000-square-foot bottling plant in Mecosta reflects the fact that bottled water is big business, with annual sales of $6 billion (up 35 percent since 1997). Many county residents, in fact, are thrilled about Nestle?’s being there. The Ice Mountain plant employs about a hundred people at $12 to $23 per hour, significantly more than many local jobs pay. And the company shells out hundreds of thousands of dollars in local taxes. Township supervisor Maxine McClellan says, “This is probably the best project we’ve ever brought into Mecosta County.” She adds that she wants “a diversi- fied economy where our kids don’t have to move away to find jobs.” The problem, as some local residents see it, is that Nestle? has also built a 12-mile stainless steel pipeline from the plant to Sanctuary Spring, which sits on an 850-acre private deer-hunting ranch and is part of the headwaters of the Little Muskegon River, which flows into the Muskegon and then into Lake Michigan. The company started pumping 130 gallons of water every minute from the spring, with plans to increase that to 400 gallons per minute, or about 262 million gallons a year. But whose water is Nestle? pumping? That’s the question being asked by Michigan Citizens for Water Conservation (MCWC), a local Mecosta group that has filed suit contesting Nestle?’s right to the spring’s waters. Although the company has a ninety-nine-year lease on the land, MCWC contends that the water itself is a public resource. As Jim Olson, MCWC’s lawyer, explains it, under the doctrine of “reasonable use” the owners of a stream can use its water for drinking, boating, swimming, or anything else “as long as it’s in connection with their land.” But, he argues, “this does not include the right to transport water to some distant land for [some other] use. We’re arguing that the same is true with groundwater—you can’t sever it from the estate.” Michigan State Senator Ken Sikkema, who chaired a task force on Michigan water issues, rejects that argument: “A farmer pumps water out of the ground, waters potatoes, and sends the potatoes to Illinois—there’s no real differ- ence. The water in those potatoes is gone.” This reasoning hasn’t assuaged the fears of three American Indian tribes who have joined the fray. Citing an 1836 treaty that protects their fishing and hunting rights in the Great Lakes region, they have brought a federal lawsuit against Nestle? and the state of Michigan to stop what they see as a massive water grab. “Our fear,” says a spokesperson for the Little Traverse Bay Bands of Odawa Indians, “is that the export could significantly and permanently damage the fishery.” However, David K. Ladd, head of the Office of Great Lakes, argues that bottled water is a special case. Legally, he contends, it’s a “food,” regulated by the Food and Drug Administration. “There’s no difference between Perrier bottling water, Gerber making baby food, or Miller brewing beer. When you incorporate water from the basin into a product, it’s no longer water per se.” And Brendan O’Rourke, an Ice Mountain plant manager, adds that the 262 million gallons it wants to pump are less than 1 percent of the annual recharge rate of the local watershed, equivalent to just 14 minutes of evapora- tion from the surface of Lake Michigan. For their part, scientists opposed to the project argue that Nestle?’s pumping has already lowered the local water table and that northern pike are having trouble spawning in a stream fed by Sanctuary Spring. Jim Olson argues that the Ice Mountain plant should reduce its water consumption to 100 gallons per minute or less, not increase it to 400 gallons. “Every gallon removed is needed for the stream to sustain itself,” he states. “The right to withdraw groundwater does not include the right to diminish . . . existing or future uses.” To the surprise of many, Michigan state court judge Lawrence Root bought that argument and upheld the MCWC’s lawsuit. Ruling that the environment is at risk no matter how much water Nestle? draws out, he ordered the pumps turned off. Two years later, an appellate court reversed Judge Root’s deci- sion, and MCWC and Nestle? subsequently entered an agree- ment limiting Nestle?’s withdrawals from Sanctuary Spring to 250 gallons per minute—although there has been some legal skirmishing between the two antagonists since then. In the meantime, however, the political tide has turned against Nestle?. Small towns in Maine and California have opposed its building new bottled water plants in their jurisdictions; Congress has held hearings into the diversion of groundwater by bottled water companies and other businesses; and Michigan has passed.legislation that, among other things, makes it virtually impos- sible for operations such as the Ice Mountain plant to remove more than 100,000 gallons of groundwater per day

Assess this case from the perspective of the utilitarian, libertarian, and Rawlsian theories of justice. How would each address the case? Which theory’s approach do you find the most helpful or illuminating

On January 2, 2021, Green Inc had pretax accounting income of $6,800,000 and taxable income of $9,680,000 for the year ended December 31, 2021. The 2021 tax rate was 25%. The only difference between book and taxable income is estimated warranty costs. Expected payments and scheduled enacted tax rates are as follows:

  
Required:
Prepare one compound journal entry to record Green's provision for taxes for the year 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Question 6

Jackpot Limited uses a perpetual inventory system. Inventory data for the year ended December 31, 2019, are as follows:

Beginning inventory 35 units at $130 each

February 28 purchase 25 units at $145 each

1st quarter sales 40 units

July 31 purchase 45 units at $115 each

2nd quarter sales 55 units

October 31 purchase 60 units at $125 each

Required

Determine the amounts to report for Cost of Goods Sold and Ending inventory using FIFO and the weighted-average cost method.

York Co. sells one product, which it purchases from various suppliers. York’s trial balance at December 31, 2021, included the following accounts:

York Co.’s inventory purchase during 2021 were as follows:

Additional information:

1. York’s accounting policy is to report inventory in its financial statements at the lower of cost or net realizable value, applied to total inventory. Cost is determined under the FIFO method.
2. York has determined that, at December 31, 2021, the net realizable value was $8.00 per unit.

REQUIRED:

a)      Prepare York’s schedule of cost of goods sold, with a supporting schedule of ending inventory. York includes inventory write-down losses in cost of goods sold.

b)     Determine whether inventory should be reported at cost or net realizable value.

c)      Show the financial statements presentation of inventory and all related accounts.

d)     Explain, Inventory valued at the LCNRV is an example of which principle in accounting?

e)      Discuss why IFRS removed LIFO and considered it as going against certain accounting principles.

Attaboy sells sports jerseys. The jerseys are manufactured by a supplier that makes them according to Attaboy’s specifications. You are the chief financial officer for Attaboy and you need to prepare a master budget for Year4. Attaboy needs the budget for the year, broken down by quarters.

Here is Attaboy’s balance sheet as of the end of Year3 (which, of course, is the beginning of Year4)

Cash 36,800$

Accounts Receivable 353,000

Inventory 10,000

PP&E 415,000

Accumulated depreciation (200,000)

$614,800

Acct Payable 426,000

Capital stock 150,000

Retained earnings 38,800

Total L&S E 614,800

You have gathered the following information about expected activity:

1.The marketing department provided projected sales for Attaboy. In Quarters 1 and 2, each jersey is expected to sell for $40. A $2 price increase is predicted in Quarter 3 and a $3 increase in Quarter 4.

Quarter 1, Year4: 21,000jerseys

Quarter 2,Year4: 25,000jerseys

Quarter 3,Year4: 23,000jerseys

Quarter 4,Year4: 22,000jerseys

Quarter 1,Year5: 23,000jerseys

2.Attaboy sells all of the merchandise on credit. Historically,Attaboy receives 70% of each quarter's sales during the quarter, 20% in the next quarter, and 10% in the quarter after that. Accounts receivable at 12/31/Year3are expected to be collected as follows:$238,000 in Quarter 1 and $115,000 in Quarter 2.

3.Attaboy estimates that it will have a gross margin percentage of 60% in Year4. They suffered from a shortage of inventory at the end of Year4, so they plan to keep inventory levels much higher in Year4. Inventory levels are budgeted to be 35% of the next quarters cost of goods sold.They pay for inventory purchases in the quarter following the purchase.

4.Variable selling and administrative costs are estimated at $10 per unit sold. Fixed selling and administrative costs are $70,000 per quarter. (This amount includes $3,000 of depreciation per quarter).

5.Attaboy will purchase land for $500,000 in the third quarter, for cash.They hope to begin construction on a flagship facility in Year5.

6.Attaboy pays quarterly dividends of $50,000.The dividends are paid in the same quarter they are declared.

7.Attaboy has to maintain a minimum cash balance of $30,000. Any projected borrowings are assumed to be borrowed at the beginning of the quarter. Payments are made at the end of the following quarters to the extent cash is available. All borrowings and repayments are made in $10,000 increments. Interest is paid at the time of repayment. Interest is calculated at 12% per year (no compounding).

Calculate the present value of the following annuity streams: a. $6,000 received each year for 6 years on the last day of each year if your investments pay 7 percent compounded annually. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Present value $ b. $6,000 received each quarter for 6 years on the last day of each quarter if your investments pay 7 percent compounded quarterly. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Present value $ c. $6,000 received each year for 6 years on the first day of each year if your investments pay 7 percent compounded annually. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Present value $ d. $6,000 received each quarter for 6 years on the first day of each quarter if your investments pay 7 percent compounded quarterly. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

1. Teller Co. is planning to sell 900 boxes of ceramic tile, with production estimated at 870 boxes during May. Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $12.00 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Teller has 3,900 pounds of clay mix in beginning inventory and wants to have 4,500 pounds in ending inventory.

What is the total amount to be budgeted for manufacturing overhead for the month?

Select one:

a. $11,484

b. $2,871

c. $11,880

d. $2,970

2. Haft Construction Company determines that 54,000 pounds of direct materials are needed for production in July. There are 3,200 pounds of direct materials on hand at July 1 and the desired ending inventory is 2,800 pounds. If the cost per unit of direct materials is $3, what is the budgeted total cost of direct materials purchases?

Select one:

a. $165,600

b. $160,800

c. $163,200

d. $158,400

3. Dolce Co. estimates its sales at 180,000 units in the first quarter and that sales will increase by 18,000 units each quarter over the year. They have, and desire, a 25% ending inventory of finished goods. Each unit sells for $25. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale.

Cash collections for the third quarter are budgeted at

Select one:

a. $6,156,000

b. $4,428,000

c. $3,051,000

d. $5,319,000

4. The cash budget reflects

Select one:

a. expected cash receipts and cash disbursements from all sources

b. all the items that appear on a budgeted income statement

c. all the items that appear on a budgeted balance sheet

d. all revenues and all expenses for a period

5. Burr, Inc.'s direct materials budget shows total cost of direct materials purchases for April $400,000, May $480,000 and June $560,000. Cash payments are 60% in the month of purchase and 40% in the following month. The budgeted cash payments for June are

Select one:

a. $528,000

b. $512,000

c. $480,000

d. $416,000

Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $54. Wesley expects the following unit sales: January 4,600 February 4,800 March 5,300 April 5,100 May 4,500 Wesley’s ending finished goods inventory policy is 20 percent of the next month’s sales. Suppose each handisaw takes approximately .75 hours to manufacture, and Wesley pays an average labor wage of $30 per hour. Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $5.00 each. The company has an ending raw materials inventory policy of 25 percent of the following month’s production requirements. Materials other than the housing unit total $4.50 per handisaw. Manufacturing overhead for this product includes $72,000 annual fixed overhead (based on production of 27,000 units) and $1.20 per unit variable manufacturing overhead. Wesley’s selling expenses are 7 percent of sales dollars, and administrative expenses are fixed at $18,000 per month. Required: 1. Compute the following for the first quarter: (Do not round your intermediate calculations.)

question demand:

compute the following for the first quarter: for janurary feburary and march

1. Budgeted sales revenue

2.Budgeted production in units

3.Budgeted cost of raw material purchases for the plastic housings

4.Budgeted direct labor cost

PA8-4 Preparing Operating Budget Components [LO 8-3a, b, c, d]

Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $44. Wesley expects the following unit sales:

Wesley’s ending finished goods inventory policy is 30 percent of the next month’s sales.
       Suppose each handisaw takes approximately .60 hours to manufacture, and Wesley pays an average labor wage of $20 per hour.
       Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $7.00 each. The company has an ending raw materials inventory policy of 20 percent of the following month’s production requirements. Materials other than the housing unit total $4.50 per handisaw.
       Manufacturing overhead for this product includes $72,000 annual fixed overhead (based on production of 27,000 units) and $1.20 per unit variable manufacturing overhead. Wesley’s selling expenses are 7 percent of sales dollars, and administrative expenses are fixed at $18,000 per month.

Required:
1. Compute the following for the first quarter: (Do not round your intermediate calculations.)

FIND FOR JANUARY, FEBRUARY, MARCH and First quarter total

1. Budgeted Sales Revenue
2. Budgeted Production in Units 3. Budgeted Cost of Raw Material Purchases for the Plastic Housings 4. Budgeted Direct Labor Cost