Exercise 1 (LO 1, 2) Gross profit: separate firms versus consolidated. Sorel is an 80%-owned subsidiary of Pattern Company. The two affiliates had the following separate income statements for 2015 and 2016.
| Sorel Company | Pattern Company | |||
| 2015 | 2016 | 2015 | 2016 | |
| Sales Revenue | 250,000 | 350,000 | 500,000 | 540,000 |
| Cost of Good Sold | 150,000 | 210,000 | 310,000 | 360,000 |
| Gross Profit | 100,000 | 140,000 | 190,000 | 180,000 |
| Expenses | 45,000 | 66,000 | 120,000 | 125,000 |
| Net Income | 55,000 | 74,000 | 70,000 | 55,000 |
Sorel sells at the same gross profit percentage to all customers. During 2015, Sorel sold goods Pattern for the first time in the amount of $120,000. $30,000 of these sales remained in Pattern's ending inventory. During 2016, sales to Pattern by Sorel were $150,000, of which $25,000 sales were still in Pattern's December 31, 2016, inventory.
Prepare consolidated income statements including the distribution of income to the controlling and noncontrolling interest for 2015 and 2016.
In: Accounting
Swathmore Clothing Corporation grants its customers 30 days’ credit. The company uses the allowance method for its uncollectible accounts receivable. During the year, a monthly bad debt accrual is made by multiplying 3% times the amount of credit sales for the month. At the fiscal year-end of December 31, an aging of accounts receivable schedule is prepared and the allowance for uncollectible accounts is adjusted accordingly. At the end of 2015, accounts receivable were $590,000 and the allowance account had a credit balance of $54,000. Accounts receivable activity for 2016 was as follows: Beginning balance $ 590,000 Credit sales 2,700,000 Collections (2,563,000) Write-offs (47,000) Ending balance $ 680,000 The company’s controller prepared the following aging summary of year-end accounts receivable: Summary Age Group Amount Percent Uncollectible 0–60 days $ 410,000 5 % 61–90 days 97,000 11 91–120 days 57,000 27 Over 120 days 116,000 38 Total $ 680,000 Required: 1. Prepare a summary journal entry to record the monthly bad debt accrual and the write-offs during the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 2. Prepare the necessary year-end adjusting entry for bad debt expense. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 3-1. What is total bad debt expense for 2016? 3-2. How would accounts receivable appear in the 2016 balance sheet?
In: Accounting
Listed below is the number of movie tickets sold at the Library Cinema-Complex, in thousands, for the period from 2004 to 2016. Compute a five-year weighted moving average using weights of 0.11, 0.17, 0.26, 0.13, and 0.33, respectively. Describe the trend in yield. (Round your answers to 3 decimal places.)
20048.79 20058.36 20067.78 20076.75 20087.4 20096.5 20106.53 20116.58 20125.56 20135.69 20145.77 20155.44 20165.33
The weighted moving averages are: (9 of them)
In: Statistics and Probability
1. In the research entitled, "Religion, Spirituality, and Health in Medically Ill Hospitalized Older Patient" by H.G. Koenig, L.K. George, & P. Titus (2004). Is the research design qualitative or quantitative?
2. Is the research design based on a positivist paradigm or constructionist paradigm?
3. What is the worldview of the nursing profession?
5. How are worldviews related to religion?
5. Discuss the aspects of the two paradigms that consistent with the nursing profession worldview.
6. Why is it important to know your worldview?
In: Nursing
| May 1 | Purchased merchandise on account from Hilton Wholesale Supply for $7,600, terms 2/10, n/30. | |
| 2 | Sold merchandise on account for $4,100, terms 3/10, n/30. The cost of the merchandise sold was $3,500. | |
| 5 | Received credit from Hilton Wholesale Supply for merchandise returned $300. | |
| 9 | Received collections in full, less discounts, from customers billed on May 2. | |
| 10 | Paid Hilton Wholesale Supply in full, less discount. | |
| 11 | Purchased supplies for cash $840. | |
| 12 | Purchased merchandise for cash $2,840. | |
| 15 | Received $250 refund for return of poor-quality merchandise from supplier on cash purchase. | |
| 17 | Purchased merchandise from Northern Distributors for $2,300, terms 2/10, n/30. | |
| 19 | Paid freight on May 17 purchase $220. | |
| 24 | Sold merchandise for cash $5,620. The cost of the merchandise sold was $4,400. | |
| 25 | Purchased merchandise from Toolware Inc. for $790, terms 3/10, n/30. | |
| 27 | Paid Northern Distributors in full, less discount. | |
| 29 | Made refunds to cash customers for returned merchandise $120. The returned merchandise was returned to inventory and had cost $80. | |
| 31 | Sold merchandise on account for $1,200, terms n/30. The cost of the merchandise sold was $820. |
Record the above transactions
In: Accounting
Scott, Inc. common stock has an equity beta of 1.1,
the annual risk-free rate is 5%, and the expected return on the
market portfolio is 10%. The firm expects that following 2009 its
dividends will increase at the same annual compound rate as that
over the 2006-2009 period.
Year. Dividend
2006 2.5
2007 2.6
2008 2.7
2009 2.8
Estimate the value of a share of Scott, Inc.’s stock
using the dividend discount model. Round your final answer to two
decimals.
In: Finance
On Thursday, July 22, 2010, you bought (traded) the FG, Inc. 6.75% corporate bonds for $101.25. The coupon payments are paid on May 31 and November 30. Using the 360-day accrual basis, calculate the invoice price of the bonds. Please use T+3 to calculate the settlement day (use 2 decimals).
In: Finance
In: Finance
9% of the customers of a mortgage company default on their payments.
A sample of seven customers is selected.
What is the probability that exactly three customers in the sample will default on their payments?
Round your FINAL answer to the nearest 4 decimal points. For example, 0.0223 or 0.2579
In: Statistics and Probability
The following is a list of account titles and amounts (in millions) reported at December 27, 2015, by Hashey, Inc. a leading manufacturer of games, toys, and interactive entertainment software for children and families:
| Accounts Receivable | $ | 1,106 | Equipment | $ | 486 | ||
| Accumulated Amortization | 741 | Goodwill | 591 | ||||
| Accumulated Depreciation | 496 | Inventories | 346 | ||||
| Allowance for Doubtful Accounts | 32 | Land | 11 | ||||
| Buildings | 236 | Licensing Rights | 1,859 | ||||
| Cash and Cash Equivalents | 676 | Prepaid Rent | 351 | ||||
Required:
In: Accounting