3. Below are two independent sets of transactions for Welcott Company:
(a) Welcott provides its employees with varying amounts of vacation per year, depending on the length of employment. The estimated amount of the current year's vacation pay is $78,000. Journalize the adjusting entry required on January 31, the end of the first month of the year, to record the accrued vacation pay.
(b) Welcott maintains a defined contribution pension plan for its employees. The plan requires quarterly installments to be paid to the funding agent, Northern Trust, by the fifteenth of the month following the end of each quarter. Assuming that the pension cost is $119,600 for the quarter ended December 31, journalize entries to record (1) the accrued pension liability on December 31 and (2) the payment to the funding agent on January 15.
4. Lamar Industries warrants its products for one year. The estimated product warranty expense is 3% of sales. Sales for June were $190,000. In July, a customer received warranty repairs requiring $185 of parts and $50 of labor.
(a) Journalize the adjusting entry required at June 30, the end of the first month of the current year, to record the estimated product warranty expense.
(b) Journalize the entry to record the warranty work provided in July.
5. On January 1, Yeargan Company obtained a $125,000, 7-year 5% installment note from Farmers Bank. The note requires annual payments of $21,602, with the first payment occurring on the last day of the fiscal year. The first payment consists of $6,250 interest and principal repayment of $15,352
Journalize the following entries:
(a) Issued the installment note for cash on January 1.
(b) Paid the first annual payment on the note.
In: Accounting
Classify the actions as either discretionary spending or automatic stabilizers by placing each item in one of the two categories.
| Discretionary Spending | Automatic stabilizers |
- A bill is passed to increase unemployment benefit payments
- Government spending on welfare increases because high unemployment leads to an increase in applicants
- A law is enacted that increases Medicare coverage
- The government cuts taxes to stimulate consumer spending
- The government increases tax rates to prevent inflation
- Tax revenue increases as a result of economic growth, increasing personal income
- Congress votes to cut government spending to balance the budget
- Corporate profits decline due to a recession, causing a reduction in tax revenue
- Widespread layoffs trigger an increase in government spending on unemployment benefits
In: Economics
1Mia puts money into a piggy bank so she can spend it later. What function of money does this illustrate
store of value
medium of exchange
unit of account
None of the above is correct.
2) The primary difference between commodity money and fiat money is that
commodity money is a medium of exchange but fiat money is not.
fiat money is a medium of exchange but commodity money is not.
commodity money has intrinsic value but fiat money does not.
fiat money has intrinsic value but commodity money does not.
3) If the reserve ratio is 5 percent, then a person depositing $500 into a bank can create up to
$10,500 of new money.
$10,000 of new money.
$9,500 of new money.
$2,500 of new money.
4) If the Federal Open Market Committee decides to increase the money supply, then the Federal Reserve
creates dollars and uses them to purchase government bonds from the public.
sells government bonds from its portfolio to the public.
creates dollars and uses them to purchase various types of stocks and bonds from the public.
sells various types of stocks and bonds from its portfolio to the public.
5) During a recession the economy experiences
rising employment and income.
rising employment and falling income
. rising income and falling employment.
falling employment and income.
In: Economics
Inventory balances at the beginning and end of the year were as follows: Beginning of Year End of Year Raw materials $ 54,000 $ 34,000 Work in process ? $ 31,000 Finished goods $ 37,000 ? The total manufacturing costs for the year were $680,000; the cost of goods available for sale totaled $730,000; the unadjusted cost of goods sold totaled $662,000; and the net operating income was $30,000. The company’s underapplied or overapplied overhead is closed to Cost of Goods Sold. Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)
In: Accounting
2. Zero Coupon Bond
B Company sold a $5,000,000, 8 year zero coupon (zero interest paid) bond on January 1,
2018 to yield an effective interest rate of 7% annual.
Calculate the sale price of the bond. Prepare an 8 year amortization schedule. Make any
required entry on December 31, 2021 and on Dec. 31, 2025.
In: Accounting
Among the fun details in the article are the following estimates of price elasticity of demand:
|
Cigarettes (US) • −0.3 to −0.6 (General) • −0.6 to −0.7 (Youth) |
Rice • −0.8 (Bangladesh) • −0.8 (China) • −0.25 (Japan) |
|
Cannabis (US) • −0.655 |
Soft drinks • −0.8 to −1.0 (general) • −3.8 (Coca-Cola) • −4.4 (Mountain Dew) |
A. Explain why the different estimates of price elasticity of demand for cigarettes regarding youth as opposed to all smokers in general either does or doesn’t seem to make sense.
B. Assuming that Japan is a wealthier country than either Bangladesh or China, why would demand for rice be less elastic in Japan than in either of the two other countries?
C. Why is demand for Coke and Mountain Dew more elastic than the demand for soft drinks in general?
D. If the price elasticity of supply for cannabis is 0.4, who would bear most of the burden of a cannabis tax, consumers or suppliers? Explain why.
In: Economics
6. A lawyer commutes daily from his suburban home to his midtown office. The average time for a one-way trip is 24 minutes, with a standard deviation of 3.8 minutes. Assume the distribution of the trip-length to be normally distributed. (a) If the office opens at 9:00am and he leaves his house at 8:40 am daily, what percentage of the time is he late for work? You must draw the distribution and indicate the relevant numbers etc. You must also give the answer as a number. (b) Find the length of time above which we find the longest 20% of the trips. You must draw the distribution and indicate the relevant numbers etc. You must also give the answer as a number. (c) During a period of 20 work days, on how many days should you expect the lawyer to be late for work? (d) What is the probability that he is late on at most 10 of those 20 days?
In: Math
Required information
Schedules of Expected Cash Collections and Disbursements; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-9, LO8-10]
[The following information applies to the questions displayed below.]
Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below:
| Beech Corporation | ||
| Balance Sheet | ||
| June 30 | ||
| Assets | ||
| Cash | $ | 90,000 |
| Accounts receivable | 136,000 | |
| Inventory | 62,000 | |
| Plant and equipment, net of depreciation | 210,000 | |
| Total assets | $ | 498,000 |
| Liabilities and Stockholders’ Equity | ||
| Accounts payable | $ | 71,100 |
| Common stock | 327,000 | |
| Retained earnings | 99,900 | |
| Total liabilities and stockholders’ equity | $ | 498,000 |
Exercise 8-13
Beech’s managers have made the following additional assumptions and estimates:
Estimated sales for July, August, September, and October will be $210,000, $230,000, $220,000, and $240,000, respectively.
All sales are on credit and all credit sales are collected. Each month’s credit sales are collected 45% in the month of sale and 55% in the month following the sale. All of the accounts receivable at June 30 will be collected in July.
Each month’s ending inventory must equal 20% of the cost of next month’s sales. The cost of goods sold is 60% of sales. The company pays for 30% of its merchandise purchases in the month of the purchase and the remaining 70% in the month following the purchase. All of the accounts payable at June 30 will be paid in July.
Monthly selling and administrative expenses are always $60,000. Each month $5,000 of this total amount is depreciation expense and the remaining $55,000 relates to expenses that are paid in the month they are incurred.
The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30.
Required:
1. Prepare a schedule of expected cash collections for July, August, and September. Also compute total cash collections for the quarter ended September 30.
2-a. Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30.
2-b. Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September. Also compute total cash disbursements for merchandise purchases for the quarter ended September 30.
3. Prepare an income statement for the quarter ended September 30.
4. Prepare a balance sheet as of September 30.
In: Accounting
Required information
Schedules of Expected Cash Collections and Disbursements; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-9, LO8-10]
[The following information applies to the questions displayed below.]
Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below:
| Beech Corporation | ||
| Balance Sheet | ||
| June 30 | ||
| Assets | ||
| Cash | $ | 92,000 |
| Accounts receivable | 130,000 | |
| Inventory | 48,600 | |
| Plant and equipment, net of depreciation | 216,000 | |
| Total assets | $ | 486,600 |
| Liabilities and Stockholders’ Equity | ||
| Accounts payable | $ | 77,000 |
| Common stock | 329,000 | |
| Retained earnings | 80,600 | |
| Total liabilities and stockholders’ equity | $ | 486,600 |
Exercise 8-13 (Algo)
Beech’s managers have made the following additional assumptions and estimates:
Estimated sales for July, August, September, and October will be $270,000, $290,000, $280,000, and $300,000, respectively.
All sales are on credit and all credit sales are collected. Each month’s credit sales are collected 45% in the month of sale and 55% in the month following the sale. All of the accounts receivable at June 30 will be collected in July.
Each month’s ending inventory must equal 20% of the cost of next month’s sales. The cost of goods sold is 60% of sales. The company pays for 30% of its merchandise purchases in the month of the purchase and the remaining 70% in the month following the purchase. All of the accounts payable at June 30 will be paid in July.
Monthly selling and administrative expenses are always $50,000. Each month $5,000 of this total amount is depreciation expense and the remaining $45,000 relates to expenses that are paid in the month they are incurred.
The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30.
Required:
1. Prepare a schedule of expected cash collections for July, August, and September. Also compute total cash collections for the quarter ended September 30.
2-a. Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30.
2-b. Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September. Also compute total cash disbursements for merchandise purchases for the quarter ended September 30.
3. Prepare an income statement for the quarter ended September 30.
4. Prepare a balance sheet as of September 30.
In: Accounting
Required information
Schedules of Expected Cash Collections and Disbursements; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-9, LO8-10]
[The following information applies to the questions displayed below.]
Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below:
| Beech Corporation | ||
| Balance Sheet | ||
| June 30 | ||
| Assets | ||
| Cash | $ | 94,000 |
| Accounts receivable | 145,000 | |
| Inventory | 59,400 | |
| Plant and equipment, net of depreciation | 222,000 | |
| Total assets | $ | 520,400 |
| Liabilities and Stockholders’ Equity | ||
| Accounts payable | $ | 83,000 |
| Common stock | 331,000 | |
| Retained earnings | 106,400 | |
| Total liabilities and stockholders’ equity | $ | 520,400 |
Exercise 8-13
Beech’s managers have made the following additional assumptions and estimates:
Estimated sales for July, August, September, and October will be $330,000, $350,000, $340,000, and $360,000, respectively.
All sales are on credit and all credit sales are collected. Each month’s credit sales are collected 45% in the month of sale and 55% in the month following the sale. All of the accounts receivable at June 30 will be collected in July.
Each month’s ending inventory must equal 20% of the cost of next month’s sales. The cost of goods sold is 60% of sales. The company pays for 30% of its merchandise purchases in the month of the purchase and the remaining 70% in the month following the purchase. All of the accounts payable at June 30 will be paid in July.
Monthly selling and administrative expenses are always $42,000. Each month $6,000 of this total amount is depreciation expense and the remaining $36,000 relates to expenses that are paid in the month they are incurred.
The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30.
Required:
1. Prepare a schedule of expected cash collections for July, August, and September. Also compute total cash collections for the quarter ended September 30.
2-a. Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30.
2-b. Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September. Also compute total cash disbursements for merchandise purchases for the quarter ended September 30.
3. Prepare an income statement for the quarter ended September 30.
4. Prepare a balance sheet as of September 30.
In: Accounting