Chapter 3: The Adjusting Process (Continued)
1. Please explain what accrued expenses are and let us know why these adjustments are necessary. Please provide an example of an adjusting entry for an accrued expense.
2. Please explain what accrued revenues are and let us know why these adjustments are necessary. Please provide an example of an adjusting entry for accrued revenues.
3. Please explain what an Unearned Revenue account is and why an adjustment may be necessary for Unearned Revenue. Please provide an example of an adjusting entry for Unearned Revenue.
Responses to Classmates:
Please provide your classmates with one additional example of an accrued expense adjustment and an accrued revenue adjustment.
Response to Instructor:
Please check your thread for questions or comments from me and be sure to provide a comprehensive response, as requested.
Writing:
Please make sure that your initial post contains a properly cited reference. Please use APA style. You should cite your text as a minimum. Additionally, check your spelling and proofread your post before you hit the submit button.
In: Accounting
For the past several years, you’ve been purchasing a product from a supplier at a high-volume cost and reselling the product at a lower price than your customers could buy it. However, you’d like to improve the product but the manufacturer isn’t interested in doing this. You are trying to determine if it would make sense to buy the equipment and make it yourself with better quality.
Construct two decision trees (one for each scenario), including expected money value, for the following scenario information.
Scenario A:
Scenario B:
In: Statistics and Probability
Trevorrow Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 6,800 units, but its actual level of activity was 6,760 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June:
Data used in budgeting:
| Fixed element per month | Variable element per unit | ||||
| Revenue | - | $ | 28.20 | ||
| Direct labor | $ | 0 | $ | 2.60 | |
| Direct materials | 0 | 10.50 | |||
| Manufacturing overhead | 37,800 | 1.30 | |||
| Selling and administrative expenses | 23,400 | 0.40 | |||
| Total expenses | $ | 61,200 | $ | 14.80 | |
Actual results for June:
| Revenue | $ | 198,068 |
| Direct labor | $ | 17,068 |
| Direct materials | $ | 68,770 |
| Manufacturing overhead | $ | 46,478 |
| Selling and administrative expenses | $ | 26,174 |
The overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for June would be closest to:
Multiple Choice
$9,658 U
$9,658 F
$10,194 U
$10,194 F
In: Accounting
On January 2, SHB Company receives a 3-year, $10,000, noninterest bearing note, the present value of which is $7,722. The rate implicit on this transaction is 9%. You are completing SHB's note receivable account.
To prepare each required journal entry:
Enter the corresponding debit or credit amount in the associated column.
Round all amounts to the nearest whole number.
Not all rows in the table might be needed to complete each journal entry.
If no journal entry is needed, check the “No entry required” box at the top of the table as your response.
1. Prepare the entry to record the acquisition of the note.
No Entry Required
| Account Name |
Debit |
Credit |
| Notes receivable | ||
| Discount on notes receivable | ||
| Cash |
2. Prepare the adjusting entry necessary to record interest revenue at the end of the first year.
No Entry Required
| Account Name |
Debit |
Credit |
| Discount on notes receivable | ||
| Interest revenue |
3. Prepare the adjusting entry necessary to record interest revenue at the end of the second year.
No Entry Required
| Account Name |
Debit |
Credit |
| Discount on notes receivable | ||
| Interest revenue |
In: Accounting
Consider the following linear programming problem
| Maximize | $4X1 + $5X2 | |
| Subject To | 2X1 + 5X2 ≤ 40 hr |
Constraint A |
| 3X1 + 3X2 ≤ 30 hr |
Constraint B |
|
|
X1, X2 ≥ 0 |
Constraint C |
if A and B are the two binding constraints.
(Round to ONLY two digits after decimal points)
a) What is the range of optimality of the objective function?
.......... ≤ C1/C2 ≤ ............
b) Suppose that the unit revenues for X1 and X2 are changed to $100 and $18, respectively. Will the current optimum remain the same?
............... that because the new C1/C2 is ........... which is .............. the range of optimality
c) Suppose that the unit revenue of X1 is fixed $4. What is the associated range for the unit revenue for X2 that will keep the optimum unchanged?
.......... ≤ C2 ≤ ............
d) The Shadow Price for Constraint A is ..........
e) The Shadow Price for Constraint B is .........
f) If only the capacity of Constraint A is increased from the present 40 hours to 45 hours, The increase in revenue will be = $..........
g) A suggestion is made to increase the capacities of Constraint A and B by an hour at the additional cost of $1/hr. Is this advisable?
This is advisable for .............. and the total additional net revenue per hour would be $............
In: Operations Management
1. The demand function for the Baye Firm is: P = 100 – 0.5 Q
The firm’s total cost function is: 1500 – 10 Q + 0.5Q2
(a) Is this a perfectly competitive firm? (5 Points)
(b) Find the output level and price at which the firm’s total revenue is maximized. (10 Points)
(c) Find the output level and price at which the firm’s total profit is maximized. (10 Points)
(d) Is demand elastic, unitary elastic, or inelastic at the output
level where total revenue
is maximized? (10 Points)
(e) Is demand elastic, unitary elastic, or inelastic at the output
level where total profit
is maximized? (10 Points)
(f) What is the value of the firm’s total fixed cost at the output
level where total revenue
is maximized? What about at the output level where total profit is
maximized? (10 Points)
(g) What is the value of the firm’s average variable cost at the
output level where total
revenue is maximized? What about at the output level where total
profit is
maximized? (10 Points)
In: Economics
| Mondrian Company show the following balances. Prepare an Income statement, statement of retained earnings and a balance sheet. | |
| Cash | 14,900 |
| Accounts receivable | 6,200 |
| Supplies | 8,400 |
| Equipment | 15,900 |
| Accounts payable | 2,400 |
| Common stock | 22,000 |
| Retained earnings, Dec. 31, Year 1 | 15,900 |
| Retained earnings, Dec. 31, Year 2 | 7,200 |
| Owner Draw | 14,200 |
| Consulting revenue | 45,200 |
| Rental revenue | 17,400 |
| Salaries expense | 18,500 |
| Rent expense | 16,700 |
| Selling and administrative expenses | 8,100 |
| Mondrian Income Statement Year 2 | |
| Total Revenue | |
| Expenses | |
| Total Expenses | |
| Net Income (Revenue- Expenses) | |
| ARMANI COMPANY | |
| Statement of Retained Earnings | |
| Dec 31, Year 2 | |
| Retained earnings, Dec. 31, Year 1 | |
| Add: Net income | |
| Less: Owner Draw | |
| Retained earnings, Dec. 31, Year 2 | |
| Mondrian Company | |||
| Balance Sheet | |||
| Dec 31 Year 2 | |||
| Assets | Liabilities | ||
| Total liabilities | |||
| Equity | |||
| Total equity | |||
| Total assets | Total liabilities and equity | ||
In: Accounting
Answers go in the yellow boxes
| Use the following information to complete the income statement for company A for the year ending December 31, 201X | ||
| Revenue | $ 120,000,000 | |
| Gross margin | 50.0% | |
| Selling General and Administrative (SG&A) | 20.0% | of revenue |
| Research and Development (R&D) | 15.00% | of revenue |
| Depreciation expense (D&A) | $ 5,000,000 | |
| Interest Expense | $ 5,000,000 | |
| Interest Income | $ 2,000,000 | |
| Tax Rate | 35% | |
| Securities Information | ||
| Weighted Average Shares (12/31/1X) | $ 10,000,000 | |
| A Warrants exercisable @ $2.00 | $ 2,200,000 | |
| B Warrants Exercisable @ $3.00 | $ 2,500,000 | |
| Stock Price (12/31/1X) | $ 4.00 | |
| COMPLETE THE FOLLOWING INCOME STATEMENT | ||
| Answers go in the yellow boxes | Points | |
| Revenue | $ 120,000,000 | |
| Cost of Goods Sold | 1 | |
| Gross Profit | 1 | |
| Operating Expenses | ||
| SG&A | 1 | |
| R&D | 1 | |
| D&A | ||
| Operating Expenses Total | 1 | |
| Operating Income | 5 | |
| Income Expense, net | 1 | |
| Pre Tax Income | 1 | |
| Tax | 1 | |
| Net Income | 2 | |
| EPS Basic | 5 | |
| EPS Diluted | 10 | |
| Total points | 30 | |
In: Finance
In: Accounting
The accounting records of Calbert Architects include the following selected, unadjusted balances a March 31: AccountsReceivable,1,300 Office Supplies, 1,100; Prepaid Rent, 1,700; Equipment, $10,000; Accumulated Depreciationlong dash—Equipment, $0, Salaries Payable, $0; Unearned Revenue, $ 600 Service Revenue, 4,500; Salaries Expense, $1,500; Supplies Expense, $0; Rent Expense, $0; Depreciation Expenselong dash—Equipment, $0.
c. Office Supplies on hand, $600. (Assume that Calbert debits an asset account when supplies are purchased.)
|
1. |
Journalize the adjusting entries using the letter and March 31 date in the date column. |
|
2. |
Post the adjustments to the T-accounts opened for you, entering each adjustment by letter. Show each account's adjusted balance. |
|
a. |
Service revenue accrued,
$ 400 |
|
b. |
Unearned revenue that has been earned,
$ 200 |
|
c. |
Office Supplies on hand,
$ 600 |
|
d. |
Salaries owed to employees,
$ 500 |
|
e. |
One month of prepaid rent has expired,
$ 850 |
|
f. |
Depreciation on equipment,
$ 150 |
In: Accounting