Colter Company prepares monthly cash budgets. Relevant data from
operating budgets for 2020 are as follows.
|
January |
February |
|||
|---|---|---|---|---|
| Sales | $435,600 | $484,000 | ||
| Direct materials purchases | 145,200 | 151,250 | ||
| Direct labor | 108,900 | 121,000 | ||
| Manufacturing overhead | 84,700 | 90,750 | ||
| Selling and administrative expenses | 95,590 | 102,850 |
All sales are on account. Collections are expected to be 50% in the
month of sale, 30% in the first month following the sale, and 20%
in the second month following the sale. Sixty percent (60%) of
direct materials purchases are paid in cash in the month of
purchase, and the balance due is paid in the month following the
purchase. All other items above are paid in the month incurred
except for selling and administrative expenses that include $1,210
of depreciation per month.
Other data:
| 1. | Credit sales: November 2019, $302,500; December 2019, $387,200. | |
| 2. | Purchases of direct materials: December 2019, $121,000. | |
| 3. | Other receipts: January—Collection of December 31, 2019, notes receivable $18,150; | |
| February—Proceeds from sale of securities $7,260. | ||
| 4. | Other disbursements: February—Payment of $7,260 cash dividend. |
The company’s cash balance on January 1, 2020, is expected to be
$72,600. The company wants to maintain a minimum cash balance of
$60,500.
b) Prepare a cash budget for January and February in columnar form.
In: Accounting
On January 1, 2020, Digital, Inc. leased heavy machinery from Young Leasing Company. The terms of the lease require annual payments of $25,000 for 20 years beginning on December 31, 2020. The interest rate on the lease is 10%. Assume the lease qualifies as a capital lease and Digital, Inc. employs the double-declining balance method to depreciate its assets. Use the time value of money factors posted in carmen to answer this question. No credit will be awarded for this question using a means other than these table factors to answer this question.
1) Calculate the book value of the leased asset at December 31, 2022.
2) Calculate the balance in the lease liability account on December 31, 2021 after the second lease payment is made.
3) Calculate the amount of the lease liability at December 31, 2021 that would be classified as a current liability.
In: Accounting
the company is rite aid 10-k filing of 2020 answers come from the filing
1. Briefly describe your company's investments and intangible
assets.
2. Does your company list "Other Assets?" If so, what items are
classified in this category?
3. Comment on any significant changes in individual assets or
liabilities.
4. Does your company have any long-term liabilities? If so, state
the largest long-term liability and when it is due?
In: Accounting
Colter Company prepares monthly cash budgets. Relevant data from
operating budgets for 2020 are as follows.
|
January |
February |
|||
|---|---|---|---|---|
| Sales | $439,200 | $488,000 | ||
| Direct materials purchases | 146,400 | 152,500 | ||
| Direct labor | 109,800 | 122,000 | ||
| Manufacturing overhead | 85,400 | 91,500 | ||
| Selling and administrative expenses | 96,380 | 103,700 |
All sales are on account. Collections are expected to be 50% in the
month of sale, 30% in the first month following the sale, and 20%
in the second month following the sale. Sixty percent (60%) of
direct materials purchases are paid in cash in the month of
purchase, and the balance due is paid in the month following the
purchase. All other items above are paid in the month incurred
except for selling and administrative expenses that include $1,220
of depreciation per month.
Other data:
| 1. | Credit sales: November 2019, $305,000; December 2019, $390,400. | |
| 2. | Purchases of direct materials: December 2019, $122,000. | |
| 3. | Other receipts: January—Collection of December 31, 2019, notes receivable $18,300; | |
| February—Proceeds from sale of securities $7,320. | ||
| 4. | Other disbursements: February—Payment of $7,320 cash dividend. |
The company’s cash balance on January 1, 2020, is expected to be
$73,200. The company wants to maintain a minimum cash balance of
$61,000.
1- Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February.
2- Prepare a cash budget for January and February in columnar form.
In: Accounting
lue Corp. has 150,950 shares of common stock outstanding. In 2020, the company reports income from continuing operations before income tax of $1,228,700. Additional transactions not considered in the $1,228,700 are as follows.
| 1. | In 2020, Blue Corp. sold equipment for $40,000. The machine had originally cost $84,400 and had accumulated depreciation of $33,400. The gain or loss is considered non-recurring. | |
| 2. | The company discontinued operations of one of its subsidiaries during the current year at a loss of $196,700 before taxes. Assume that this transaction meets the criteria for discontinued operations. The loss from operations of the discontinued subsidiary was $93,300 before taxes; the loss from disposal of the subsidiary was $103,400 before taxes. | |
| 3. | An internal audit discovered that amortization of intangible assets was understated by $38,200 (net of tax) in a prior period. The amount was charged against retained earnings. | |
| 4. | The company recorded a non-recurring gain of $125,000 on the condemnation of some of its property (included in the $1,228,700). |
Analyze the above information and prepare an income statement for
the year 2020, starting with income from continuing operations
before income tax. Compute earnings per share as it should be shown
on the face of the income statement. (Assume a total effective tax
rate of 19% on all items, unless otherwise indicated.)
(Round earnings per share to 2 decimal places, e.g.
1.47.)
| BLUE CORP. Income Statement (Partial) December 31, 2020For the Year Ended December 31, 2020For the Quarter Ended December 31, 2020 |
|||
|
Income TaxDiscontinued OperationsDividendsEarnings Per ShareExpensesGain on CondemnationIncome From Continuing OperationsIncome From Continuing Operations Before Income TaxNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesLoss from Disposal of SubsidiaryLoss from Operations of Discontinued Subsidiary |
$ | ||
|
Income TaxDiscontinued OperationsDividendsEarnings Per ShareExpensesGain on CondemnationIncome From Continuing OperationsIncome From Continuing Operations Before Income TaxNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesLoss from Disposal of SubsidiaryLoss from Operations of Discontinued Subsidiary |
|||
|
Income TaxDiscontinued OperationsDividendsEarnings Per ShareExpensesGain on CondemnationIncome From Continuing OperationsIncome From Continuing Operations Before Income TaxNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesLoss from Disposal of SubsidiaryLoss from Operations of Discontinued Subsidiary |
|||
|
Income TaxDiscontinued OperationsDividendsEarnings Per ShareExpensesGain on CondemnationIncome From Continuing OperationsIncome From Continuing Operations Before Income TaxNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesLoss from Disposal of SubsidiaryLoss from Operations of Discontinued Subsidiary |
|||
|
Income Tax Discontinued Operations Dividends Earnings Per Share Expenses Gain on Condemnation Income From Continuing Operations Income From Continuing Operations Before Income Tax Net Income / (Loss) Retained Earnings, January 1 Retained Earnings, December 31 Revenues Loss from Disposal of Subsidiary Loss from Operations of Discontinued Subsidiary |
$ | ||
|
Add Less :Applicable Income Tax ReductionDiscontinued OperationsDividendsEarnings Per ShareExpensesGain on CondemnationIncome From Continuing OperationsIncome From Continuing Operations Before Income TaxNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesLoss from Disposal of SubsidiaryLoss from Operations of Discontinued Subsidiary |
$ | ||
|
Income Tax Discontinued Operations Dividends Earnings Per Share Expenses Gain on Condemnation Income From Continuing Operations Income From Continuing Operations Before Income Tax Net Income / (Loss) Retained Earnings, January 1 Retained Earnings, December 31 Revenues Loss from Disposal of Subsidiary Loss from Operations of Discontinued Subsidiary |
|||
|
Add Less :Applicable Income Tax ReductionDiscontinued OperationsDividendsEarnings Per ShareExpensesGain on CondemnationIncome From Continuing OperationsIncome From Continuing Operations Before Income TaxNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesLoss from Disposal of SubsidiaryLoss from Operations of Discontinued Subsidiary |
|||
|
Income TaxDiscontinued OperationsDividendsEarnings Per ShareExpensesGain on CondemnationIncome From Continuing OperationsIncome From Continuing Operations Before Income TaxNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesLoss from Disposal of SubsidiaryLoss from Operations of Discontinued Subsidiary |
$ | ||
|
Income TaxDiscontinued Operations, Net of TaxDividendsEarnings Per ShareExpensesGain on CondemnationIncome From Continuing OperationsIncome From Continuing Operations Before Income TaxNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesLoss from Disposal of SubsidiaryLoss from Operations of Discontinued Subsidiary : |
|||
|
Income Tax Discontinued Operations, Net of Tax Dividends Earnings Per Share Expenses Gain on Condemnation Income From Continuing Operations Income From Continuing Operations Before Income Tax Net Income / (Loss) Retained Earnings, January 1 Retained Earnings, December 31 Revenues Loss from Disposal of Subsidiary Loss from Operations of Discontinued Subsidiary |
$ | ||
|
Income Tax Discontinued Operations, Net of Tax Dividends Earnings Per Share Expenses Gain on Condemnation Income From Continuing Operations Income From Continuing Operations Before Income Tax Net Income / (Loss) Retained Earnings, January 1 Retained Earnings, December 31 Revenues Loss from Disposal of Subsidiary Loss from Operations of Discontinued Subsidiary |
|||
|
Income Tax Discontinued Operations, Net of Tax Dividends Earnings Per Share Expenses Gain on Condemnation Income From Continuing Operations Income From Continuing Operations Before Income Tax Net Income / (Loss) Retained Earnings, January 1 Retained Earnings, December 31 Revenues Loss from Disposal of Subsidiary Loss from Operations of Discontinued Subsidiary |
$ | ||
In: Accounting
Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2020 are as follows.
|
January |
February |
|||
|---|---|---|---|---|
| Sales | $399,600 | $444,000 | ||
| Direct materials purchases | 133,200 | 138,750 | ||
| Direct labor | 99,900 | 111,000 | ||
| Manufacturing overhead | 77,700 | 83,250 | ||
| Selling and administrative expenses | 87,690 | 94,350 |
All sales are on account. Collections are expected to be 50% in the
month of sale, 30% in the first month following the sale, and 20%
in the second month following the sale. Sixty percent (60%) of
direct materials purchases are paid in cash in the month of
purchase, and the balance due is paid in the month following the
purchase. All other items above are paid in the month incurred
except for selling and administrative expenses that include $1,110
of depreciation per month.
Other data:
| 1. | Credit sales: November 2019, $277,500; December 2019, $355,200. | |
| 2. | Purchases of direct materials: December 2019, $111,000. | |
| 3. | Other receipts: January—Collection of December 31, 2019, notes receivable $16,650; | |
| February—Proceeds from sale of securities $6,660. | ||
| 4. | Other disbursements: February—Payment of $6,660 cash dividend. |
The company’s cash balance on January 1, 2020, is expected to be
$66,600. The company wants to maintain a minimum cash balance of
$55,500.
(a)
Correct answer iconYour answer is correct.
Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February.
|
Expected Collections from Customers |
||||
|---|---|---|---|---|
|
January |
February |
|||
| November |
$enter a dollar amount |
$enter a dollar amount |
||
| December |
enter a dollar amount |
enter a dollar amount |
||
| January |
enter a dollar amount |
enter a dollar amount |
||
| February | enter a dollar amount | enter a dollar amount | ||
| Total collections | $enter a total amount | $enter a total amount | ||
|
Expected Payments for Direct Materials |
||||
|---|---|---|---|---|
|
January |
February |
|||
| December |
$enter a dollar amount |
$enter a dollar amount |
||
| January |
enter a dollar amount |
enter a dollar amount |
||
| February | enter a dollar amount | enter a dollar amount | ||
| Total payments | $enter a total amount | $enter a total amount | ||
eTextbook and Media
Assistance Used
Solution
Attempts: 5 of 5 used
(b)
Partially correct answer iconYour answer is partially correct.
Prepare a cash budget for January and February in columnar form.
In: Accounting
Presented below are data taken from the records of Blue
Company.
|
December 31, |
December 31, |
|||
| Cash |
$15,100 |
$7,900 |
||
| Current assets other than cash |
85,600 |
59,800 |
||
| Long-term investments |
9,900 |
53,500 |
||
| Plant assets |
333,500 |
213,200 |
||
|
$444,100 |
$334,400 |
|||
| Accumulated depreciation |
$19,800 |
$40,000 |
||
| Current liabilities |
39,800 |
22,000 |
||
| Bonds payable |
75,100 |
–0– |
||
| Common stock |
252,600 |
252,600 |
||
| Retained earnings |
56,800 |
19,800 |
||
|
$444,100 |
$334,400 |
Additional information:
| 1. | Held-to-maturity debt securities carried at a cost of $43,600 on December 31, 2019, were sold in 2020 for $33,700. The loss (not unusual) was incorrectly charged directly to Retained Earnings. | |
| 2. | Plant assets that cost $50,000 and were 80% depreciated were sold during 2020 for $8,000. The loss was incorrectly charged directly to Retained Earnings. | |
| 3. | Net income as reported on the income statement for the year was $57,000. | |
| 4. | Dividends paid amounted to $8,100. | |
| 5. | Depreciation charged for the year was $19,800. |
Prepare a statement of cash flows for the year 2020 using the
indirect method. (Show amounts that decrease cash flow
with either a - sign e.g. -15,000 or in parenthesis e.g.
(15,000).)
In: Accounting
Sheffield Corp. has 149,910 shares of common stock outstanding. In 2020, the company reports income from continuing operations before income tax of $1,221,100. Additional transactions not considered in the $1,221,100 are as follows.
| 1. | In 2020, Sheffield Corp. sold equipment for $36,200. The machine had originally cost $81,900 and had accumulated depreciation of $34,800. The gain or loss is considered non-recurring. | |
| 2. | The company discontinued operations of one of its subsidiaries during the current year at a loss of $196,200 before taxes. Assume that this transaction meets the criteria for discontinued operations. The loss from operations of the discontinued subsidiary was $92,300 before taxes; the loss from disposal of the subsidiary was $103,900 before taxes. | |
| 3. | An internal audit discovered that amortization of intangible assets was understated by $39,200 (net of tax) in a prior period. The amount was charged against retained earnings. | |
| 4. | The company recorded a non-recurring gain of $125,500 on the condemnation of some of its property (included in the $1,221,100). |
Analyze the above information and prepare an income statement for
the year 2020, starting with income from continuing operations
before income tax. Compute earnings per share as it should be shown
on the face of the income statement. (Assume a total effective tax
rate of 19% on all items, unless otherwise indicated.)
(Round earnings per share to 2 decimal places, e.g.
1.47.)
| SHEFFIELD CORP. Income Statement (Partial) December 31, 2020For the Year Ended December 31, 2020For the Quarter Ended December 31, 2020 |
|||
|
Income TaxDiscontinued OperationsDividendsEarnings Per ShareExpensesGain on CondemnationIncome From Continuing OperationsIncome From Continuing Operations Before Income TaxNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesLoss from Disposal of SubsidiaryLoss from Operations of Discontinued Subsidiary |
$ | ||
|
Income TaxDiscontinued OperationsDividendsEarnings Per ShareExpensesGain on CondemnationIncome From Continuing OperationsIncome From Continuing Operations Before Income TaxNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesLoss from Disposal of SubsidiaryLoss from Operations of Discontinued Subsidiary |
|||
|
Income TaxDiscontinued OperationsDividendsEarnings Per ShareExpensesGain on CondemnationIncome From Continuing OperationsIncome From Continuing Operations Before Income TaxNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesLoss from Disposal of SubsidiaryLoss from Operations of Discontinued Subsidiary |
|||
|
Income TaxDiscontinued OperationsDividendsEarnings Per ShareExpensesGain on CondemnationIncome From Continuing OperationsIncome From Continuing Operations Before Income TaxNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesLoss from Disposal of SubsidiaryLoss from Operations of Discontinued Subsidiary |
|||
|
Income Tax Discontinued Operations Dividends Earnings Per Share Expenses Gain on Condemnation Income From Continuing Operations Income From Continuing Operations Before Income Tax Net Income / (Loss) Retained Earnings, January 1 Retained Earnings, December 31 Revenues Loss from Disposal of Subsidiary Loss from Operations of Discontinued Subsidiary |
$ | ||
|
Add Less :Applicable Income Tax ReductionDiscontinued OperationsDividendsEarnings Per ShareExpensesGain on CondemnationIncome From Continuing OperationsIncome From Continuing Operations Before Income TaxNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesLoss from Disposal of SubsidiaryLoss from Operations of Discontinued Subsidiary |
$ | ||
|
Income Tax Discontinued Operations Dividends Earnings Per Share Expenses Gain on Condemnation Income From Continuing Operations Income From Continuing Operations Before Income Tax Net Income / (Loss) Retained Earnings, January 1 Retained Earnings, December 31 Revenues Loss from Disposal of Subsidiary Loss from Operations of Discontinued Subsidiary |
|||
|
Add Less :Applicable Income Tax ReductionDiscontinued OperationsDividendsEarnings Per ShareExpensesGain on CondemnationIncome From Continuing OperationsIncome From Continuing Operations Before Income TaxNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesLoss from Disposal of SubsidiaryLoss from Operations of Discontinued Subsidiary |
|||
|
Income TaxDiscontinued OperationsDividendsEarnings Per ShareExpensesGain on CondemnationIncome From Continuing OperationsIncome From Continuing Operations Before Income TaxNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesLoss from Disposal of SubsidiaryLoss from Operations of Discontinued Subsidiary |
$ | ||
|
Income TaxDiscontinued Operations, Net of TaxDividendsEarnings Per ShareExpensesGain on CondemnationIncome From Continuing OperationsIncome From Continuing Operations Before Income TaxNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesLoss from Disposal of SubsidiaryLoss from Operations of Discontinued Subsidiary : |
|||
|
Income Tax Discontinued Operations, Net of Tax Dividends Earnings Per Share Expenses Gain on Condemnation Income From Continuing Operations Income From Continuing Operations Before Income Tax Net Income / (Loss) Retained Earnings, January 1 Retained Earnings, December 31 Revenues Loss from Disposal of Subsidiary Loss from Operations of Discontinued Subsidiary |
$ | ||
|
Income Tax Discontinued Operations, Net of Tax Dividends Earnings Per Share Expenses Gain on Condemnation Income From Continuing Operations Income From Continuing Operations Before Income Tax Net Income / (Loss) Retained Earnings, January 1 Retained Earnings, December 31 Revenues Loss from Disposal of Subsidiary Loss from Operations of Discontinued Subsidiary |
|||
|
Income Tax Discontinued Operations, Net of Tax Dividends Earnings Per Share Expenses Gain on Condemnation Income From Continuing Operations Income From Continuing Operations Before Income Tax Net Income / (Loss) Retained Earnings, January 1 Retained Earnings, December 31 Revenues Loss from Disposal of Subsidiary Loss from Operations of Discontinued Subsidiary |
$ | ||
In: Accounting
The Pat Company has estimated its activity for May 2020. Selected data from these estimated amounts are as follows:
Sales $350,000
Gross Profit (based on sales) 30%
Increase in trade A/R during May $10,000
Change in A/P during May $0
Increase in inventory during May $5,000
Variable selling and administrative expenses includes a charge for uncollectible accounts of 1% of sales. Depreciation expense of $20,000 per month is included in fixed selling and administrative expenses.
What are the estimated cash payments from operations for May?
In: Accounting
The Pat Company has estimated its activity for May 2020. Selected data from these estimated amounts are as follows:
Sales $350,000
Gross Profit (based on sales) 30%
Increase in trade A/R during May $10,000
Change in A/P during May $0
Increase in inventory during May $5,000
Variable selling and administrative expenses includes a charge for uncollectible accounts of 1% of sales. Depreciation expense of $20,000 per month is included in fixed selling and administrative expenses.
What are the estimated cash receipts from operations for May?
Select one:
a. $ 350,000
b. $ 360,000
c. $ 340,000
d. $ 336,500
In: Accounting