Suppose Jones Company has orders from three customers located in the same market area. One order has a total weight of 3,600 pounds, the second weighs 8,300 pounds, and the third weighs 12,100 pounds. The transportation carrier quotes a freight rate of $20 per hundredweight (or cwt.) for direct shipment to the customer for shipments weighing 1,000 to 4,999 pounds, $18 per cwt. for orders weighing 5,000 to 9,999 pounds, and $16 for shipments weighing between 10,000 and 15,000 pounds. Alternatively, the carrier’s rate for shipments weighing more than 20,000 pounds is $13.00 per cwt. However, if the orders are combined into one consolidated shipment, the carrier will charge $260 for each stop it is required to make. Calculate the total cost with or without consolidated shipment charge.

a) total cost using separate shipments

b) total cost using consolidated shipment

4. Given the elasticity, determine whether increasing/decreasing the price will increase/decrease the revenue for a firm. For instance, let's say that the price elasticity of demand is -2 between P=8 and P=10. Would a firm's revenue increase if it raises its price from 8 to 10? If you already know the price elasticity, this question does not require calculation.

Blue Spruce’s Miniature Golf and Driving Range Inc. was opened on March 1 by Bob Dean. These selected events and transactions occurred during March.

Journalize the March transactions. Blue Spruce’s records golf fees as service revenue. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Jason Hope opened a hotel. Prepare journal entries and post to the appropriate T-accounts to record the following transactions. Compute the balance as of June 30 for each T-account Hope uses the accounts Room Rental Revenue and Event Revenue. All expenses for special events are recorded as Event Expense.

June 1 Hope invested $400,000 cash into the business

June 2 Hope purchased a hotel building for $800,000 and land for $100,000. Hope paid $250,000 in cash and signed note payable for $650,000.

June 3 Paid $6,000 for a six month insurance policy on the hotel.

June 5 Purchased supplies costing $4,000 on account.

June 10 Received advance payments of $12,000 from customers that will be staying at the hotel in July. Payments will be refunded if the customer cancels within 7 days of their scheduled arrival time.

June 14: Received cash payments of $13,000 from current customers staying at the hotel in June.

June 15 Paid $2,000 cash for staff salaries. June 16 Paid $500 for maintenance expense.

June 17: Received $10,000 payment for a wedding reception hosted that day.

June 18 Paid $2,500 for catering expenses.

June 18 Paid event expenses of $1,000 for table and chair rentals.

June 19 Paid event expenses of $2,000 for flowers.

June 24 Paid for the supplies purchased on June 5.

June 25 Recorded an additional $5,000 cash received from current hotel customers for June.

June 30 Paid $2,000 cash for staff salaries.

June 30 The owner withdrew $4,000 for personal use.

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:

1. 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 3 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.
2. 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.
3. 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.

Schedule of cash payments for a service company

Horizon Financial Inc. was organized on February 28. Projected selling and administrative expenses for each of the first three months of operations are as follows:

Depreciation, insurance, and property taxes represent $30,000 of the estimated monthly expenses. The annual insurance premium was paid on February 28, and property taxes for the year will be paid in June. 74% of the remainder of the expenses are expected to be paid in the month in which they are incurred, with the balance to be paid in the following month.

Prepare a schedule of cash payments for selling and administrative expenses for March, April, and May.

Schedule of Cash Payments

Excel Learning Systems Inc. was organized on September 30, 2016. Projected selling and administrative expenses for each of the first three months of operations are as follows:

Depreciation, insurance, and property taxes represent $37,000 of the estimated monthly expenses. The annual insurance premium was paid on September 30, and property taxes for the year will be paid in June. The company expects that 74% of the remainder of the expenses will be paid in the month in which they are incurred, with the balance to be paid in the following month.

Prepare a schedule indicating cash payments for selling and administrative expenses for October, November, and December.

Following are the 2019 income statements for Katy Com and Mike Com, competitors in the computer industry. Use these financial statements to answer the required.

Required:

The table below gives the list price and the number of bids received for five randomly selected items sold through online auctions. Using this data, consider the equation of the regression line, yˆ=b0+b1x, for predicting the number of bids an item will receive based on the list price. Keep in mind, the correlation coefficient may or may not be statistically significant for the data given. Remember, in practice, it would not be appropriate to use the regression line to make a prediction if the correlation coefficient is not statistically significant.

Price in Dollars   Number of Bids
27   1
28   2
31   4
35   5
42   6

Summation Table

Step 1 of 6:

Find the estimated slope. Round your answer to three decimal places.

Step 2 of 6:

Find the estimated y-intercept. Round your answer to three decimal places.

Step 3 of 6:

Substitute the values you found in steps 1 and 2 into the equation for the regression line to find the estimated linear model. According to this model, if the value of the independent variable is increased by one unit, then find the change in the dependent variable yˆy^.

Step 4 of 6:

Determine if the statement "Not all points predicted by the linear model fall on the same line" is true or false.

Step 5 of 6:

Determine the value of the dependent variable yˆy^ at x=0.

Step 6 of 6:

Find the value of the coefficient of determination. Round your answer to three decimal places.

Problem 6-2A Calculate ending inventory, cost of goods sold, sales revenue, and gross profit for four inventory methods (LO6-3, 6-4, 6-5)

[The following information applies to the questions displayed below.]

Greg’s Bicycle Shop has the following transactions related to its top-selling Mongoose mountain bike for the month of March. Greg's Bicycle Shop uses a periodic inventory system.

For the specific identification method, the March 5 sale consists of bikes from beginning inventory, the March 17 sale consists of bikes from the March 9 purchase, and the March 27 sale consists of four bikes from beginning inventory and eight bikes from the March 22 purchase.

rev: 04_13_2020_QC_CS-208026

2. Using FIFO, calculate ending inventory and cost of goods sold at March 31.
  

3. Using LIFO, calculate ending inventory and cost of goods sold at March 31.
  

4. Using weighted-average cost, calculate ending inventory and cost of goods sold at March 31. (Round your intermediate and final answers to 2 decimal places.)

5. Calculate sales revenue and gross profit under each of the four methods. (Round weighted-average cost amounts to 2 decimal places.)