Mead Company uses a perpetual inventory system and engaged in the following transactions during the month of May:

Required:

Record the May transactions in a general journal.

GENERAL JOURNAL

Concrete Consulting Co. has the following accounts in its ledger: Cash; Accounts Receivable; Supplies; Office Equipment; Accounts Payable; Jason Payne, Capital; Jason Payne, Drawing; Fees Earned; Rent Expense; Advertising Expense; Utilities Expense; Miscellaneous Expense.

Journalize the above selected transactions for October 2019 in a two-column journal. Refer to the Chart of Accounts for exact wording of account titles.

Chart of Accounts

Journal

Journalize the above selected transactions for October 2019 in a two-column journal. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

ACCOUNTING EQUATION

I. What are two major controls for sales returns and allowances transactions? What are the control objectives for each?

II. For each of the following situations based on ASC606, indicate the audit evidence that should be obtained to determine whether revenue should be recognized or not in the current period:

The company you are auditing, Morgan Telecom, maintains an inventory of telecommunications equipment. Peaks Telephone Company placed an order for 10 new transformers valued at $5 million, and Morgan delivered them just prior to December 31. Morgan's normal business practice for this class of customer is to enter into a written sales agreement that requires the signatures of all the authorized representatives of Morgan and its customer before the contract is binding. However, Peaks has not signed the sales agreement because it is awaiting the requisite approval by the legal department. Peaks' purchasing department has orally agreed to the contract, and the purchasing manager has assured you that the contract will be approved the first week of next year.

Good Products is a retailer of appliances that offers “layaway” sales to its customers twice a year. Good retains the merchandise, sets it aside in its inventory, and collects a cash deposit from the customer. The customer signs an installment note at the time the initial deposit is received, but no payments are due until 30 days after delivery.

Taylor's Discount Stores is a discount retailer who generates revenue from the sale of membership fees it charges customers to shop at its stores. The membership arrangement requires the customer to pay the entire membership fee (usually $48) at the beginning of the arrangement. However, the customer can unilaterally cancel the membership arrangement and receive a refund of the unused portion. Based on past experiences, Taylor's estimates that 35 percent of the customers will cancel their memberships before the end of the contract.

Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $23.95 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on remote ranches that require considerable travel time. The owner’s daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below:

The total cost of operating the company for the year is $348,000 which includes the following costs:

Resource consumption is distributed across the activities as follows:

Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on.

Required:

1. Prepare the first-stage allocation of costs to the activity cost pools.

2. Compute the activity rates for the activity cost pools.

3. The company recently completed a 800 square foot carpet-cleaning job at the Flying N ranch—a 54-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system.

4. The revenue from the Flying N ranch was $191.60 (800 square feet @ $23.95 per hundred square feet). Calculate the customer margin earned on this job.

req 1

Prepare the first-stage allocation of costs to the activity cost pools.

req 2

Prepare the first-stage allocation of costs to the activity cost pools.

req 3

The company recently completed a 800 square foot carpet-cleaning job at the Flying N ranch—a 54-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system. (Round your intermediate calculations and final answer to 2 decimal places.)

req 4

The revenue from the Flying N ranch was $191.60 (8 hundred square feet @ $23.95 per hundred square feet). Calculate the customer margin earned on this job. (Round your intermediate calculations and final answers to 2 decimal places.)

Part 2

Please study the following capital budgeting project and then provide explanations for the questions outlined below:

You have been hired as a consultant for Pristine Urban-Tech Zither, Inc. (PUTZ), manufacturers of fine zithers. The market for zithers is growing quickly. The company bought some land three years ago for $2.1 million in anticipation of using it as a toxic waste dump site but has recently hired another company to handle all toxic materials. Based on a recent appraisal, the company believes it could sell the land for $2.3 million on an after-tax basis. In four years, the land could be sold for $2.4 million after taxes. The company also hired a marketing firm to analyze the zither market, at a cost of $125,000. An excerpt of the marketing report is as follows:

The zither industry will have a rapid expansion in the next four years. With the brand name recognition that PUTZ brings to bear, we feel that the company will be able to sell 3,600, 4,300, 5,200, and 3,900 units each year for the next four years, respectively. Again, capitalizing on the name recognition of PUTZ, we feel that a premium price of $750 can be charged for each zither. Because zithers appear to be a fad, we feel at the end of the four-year period, sales should be discontinued. PUTZ believes that fixed costs for the project will be $415,000 per year, and variable costs are 15 percent of sales. The equipment necessary for production will cost $3.5 million and will be depreciated according to a three-year MACRS schedule. At the end of the project, the equipment can be scrapped for $350,000. Net working capital of $125,000 will be required immediately. PUTZ has a 38% tax rate, and the required rate of return on the project is 13%.

Now please provide detailed explanation for the following:

• Explain how you determine the initial cash flows

• Discuss the notion of sunk costs and identify the sunk cost in this project

• Verify how you determine the annual operating cash flows

• Explain how you determine the terminal cash flows at the end of the project’s life

• Calculate the NPV and IRR of the project and decide if the project is acceptable

• If the company that is implementing this project is a publicly traded company, explain and justify how this project will impact the market price of the company’s stock

Provide your explanations and definitions in detail and be precise.

Please study the following capital budgeting project and then provide explanations for the questions outlined below: You have been hired as a consultant for Pristine Urban-Tech Zither, Inc. (PUTZ), manufacturers of fine zithers. The market for zithers is growing quickly. The company bought some land three years ago for $2.1 million in anticipation of using it as a toxic waste dump site but has recently hired another company to handle all toxic materials. Based on a recent appraisal, the company believes it could sell the land for $2.3 million on an after-tax basis. In four years, the land could be sold for $2.4 million after taxes. The company also hired a marketing firm to analyze the zither market, at a cost of $125,000. An excerpt of the marketing report is as follows: The zither industry will have a rapid expansion in the next four years. With the brand name recognition that PUTZ brings to bear, we feel that the company will be able to sell 3,600, 4,300, 5,200, and 3,900 units each year for the next four years, respectively. Again, capitalizing on the name recognition of PUTZ, we feel that a premium price of $750 can be charged for each zither. Because zithers appear to be a fad, we feel at the end of the four-year period, sales should be discontinued. PUTZ believes that fixed costs for the project will be $415,000 per year, and variable costs are 15 percent of sales. The equipment necessary for production will cost $3.5 million and will be depreciated according to a three-year MACRS schedule. At the end of the project, the equipment can be scrapped for $350,000. Networking capital of $125,000 will be required immediately. PUTZ has a 38% tax rate, and the required rate of return on the project is 13%. Now please provide a detailed explanation for the following: Explain how you determine the initial cash flows Discuss the notion of sunk costs and identify the sunk cost in this project Verify how you determine the annual operating cash flows Explain how you determine the terminal cash flows at the end of the project’s life Calculate the NPV and IRR of the project and decide if the project is acceptable If the company that is implementing this project is a publicly-traded company, explain and justify how this project will impact the market price of the company’s stock.

NOTE: Give detailed explanations to each question. Thank you.

A ski company in Vail owns two ski shops, one on the west side and one on the east side of Vail. Ski hat sales data (in dollars) for a random sample of 5 Saturdays during the 2004 season showed the following results. Is there a significant difference in sales dollars of hats between the west side and east side stores at the 10 percent level of significance? Saturday Sales Data ($) for Ski Hats Saturday East Side Shop West Side Shop 1 548 523 2 493 721 3 609 695 4 567 510 5 432 532 (b) State the decision rule for 10 percent level of significance. (Round your answers to 3 decimal places.) (c-1) Find the test statistic tcalc. (Round your answer to 2 decimal places. A negative value should be indicated by a minus sign.)

Complete the table below showing labor (ex: # of workers), total output, and the marginal product (MP) of labor for a company.

what is the average age in the class? what is the average feeling? what is the average city?

The 2015 financial statements for the Ernst and Young companies are summarized here: Ernst Company Young Company Balance sheet Cash $ 42,900 $ 22,900 Accounts receivable (net) 39,500 31,600 Inventory 99,200 40,900 Operational assets (net) 141,400 402,500 Other assets 84,200 305,100 Total assets $ 407,200 $ 803,000 Current liabilities $ 97,100 $ 48,800 Long-term debt (9%) 63,700 58,400 Capital stock (par $10) 149,000 511,200 Contributed capital in excess of par 29,700 105,900 Retained earnings 67,700 78,700 Total liabilities and stockholders’ equity $ 407,200 $ 803,000 Income statement Sales revenue (1/3 on credit) $ 447,300 $ 803,900 Cost of goods sold (242,800 ) (399,300 ) Expenses (including interest and income tax) (16,200 ) (312,800 ) Net income $ 188,300 $ 91,800 Selected data from the 2014 statements Accounts receivable (net) $ 19,500 $ 38,700 Inventory 94,800 46,000 Long-term debt 60,400 49,600 Other data Per share price at end of 2015 (offering price) $ 20 $ 18 Average income tax rate 20 % 20 % Dividends declared and paid in 2015 $ 34,800 $ 149,500 The companies are in the same line of business and are direct competitors in a large metropolitan area.Both have been in business approximately 10 years, and each has had steady growth. The management of each has a different viewpoint in many respects. Young is more conservative, and as its president has said, “We avoid what we consider to be undue risk.” Neither company is publicly held. Ernst Company has an annual audit by a CPA but Young Company does not. Required: 1. Complete a schedule that reflects a ratio analysis of each company. (Round your answers to 2 decimal places. Enter percentage answers rounded to 2 decimal places (i.e. 0.1234 should be entered as 12.34).)