A partial balance sheet of ACE Construction Company is shown below. Can you identify which construction accounting method this company uses and which income recognition method is used by the company? Explain how you have identified the methods.
|
Assets |
|
|
Cash |
$1,876,854 |
|
Accounts Receivable |
$875,202 |
|
Material Inventory |
$420,210 |
|
Costs and Estimated Earnings in excess of billings |
$250,653 |
|
Machinery and equipment |
$642,173 |
|
Cars and trucks |
$124,873 |
|
Less accumulated depreciation |
$218,748 |
In: Accounting
The restaurant at the Hotel Galaxy offers two choices for breakfast: an all-you-can-eat buffet and an a la carte option, where diners can order from the menu. The buffet option has a budgeted meal price of $45. The a la carte option has a budgeted average price of $34 for a meal. The restaurant manager expects that 40 percent of its diners will order the buffet option. The buffet option has a budgeted variable cost of $25 and the a la carte option averages $18 per meal in budgeted variable cost. The manager estimates that 2,000 people will order a meal in any month.
For July, the restaurant served a total of 1,800 meals, including 600 buffet options. Total revenues were $27,600 for buffet meals and $42,000 for the a la carte meals.
Required:
a. Compute the activity variance for the restaurant for July. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)
b. Compute the mix and quantity variances for July. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)
In: Accounting
A common kitchen trick to ripening fruit is to place unripe fruit near a piece of ripe fruit on the counter. This greatly increases the rate of ripening for the unripe fruit. How does this observation provide evidence that ethylene is a gas?
In: Biology
In: Economics
Hedonic Price Method:
a. Explain how the HPM can be used to measure the effects on housing values for homes that are located near
noisy airports.
b. What are some problems with the HPM approach (explain 2 problems)?
In: Economics
Guinea worm is one of the human diseases that is on the verge of eradication. There is no preventive vaccine or treatment available for the disease. Discuss the public health prevention and control efforts that have enabled the near eradication of Guinea worm disease globally.
In: Biology
In: Mechanical Engineering
|
Sales |
$ |
7,000,000 |
||
|
Cost of goods sold |
3,200,000 |
|||
|
Allocated corporate overhead |
250,000 |
|||
|
Administrative costs |
820,000 |
|||
|
General costs |
500,000 |
|||
|
Tax rate |
45 |
% |
||
What is the division's gross margin percentage?
In: Advanced Math
Problem 10-9 Interest capitalization; specific interest method [LO10-7]
On January 1, 2018, the Mason Manufacturing Company began
construction of a building to be used as its office headquarters.
The building was completed on September 30, 2019.
Expenditures on the project were as follows:
| January 1, 2018 | $ | 1,420,000 | |
| March 1, 2018 | 1,140,000 | ||
| June 30, 2018 | 1,340,000 | ||
| October 1, 2018 | 1,140,000 | ||
| January 31, 2019 | 351,000 | ||
| April 30, 2019 | 684,000 | ||
| August 31, 2019 | 981,000 | ||
On January 1, 2018, the company obtained a $3,900,000 construction
loan with a 12% interest rate. The loan was outstanding all of 2018
and 2019. The company’s other interest-bearing debt included two
long-term notes of $6,000,000 and $9,000,000 with interest rates of
8% and 10%, respectively. Both notes were outstanding during all of
2018 and 2019. Interest is paid annually on all debt. The company’s
fiscal year-end is December 31.
Required:
1. Calculate the amount of interest that Mason
should capitalize in 2018 and 2019 using the specific interest
method.
2. What is the total cost of the building?
3. Calculate the amount of interest expense that
will appear in the 2018 and 2019 income statements.
In: Accounting
On January 1, 2021, the company obtained a $3 million loan with a 11% interest rate. The building was completed on September 30, 2022. Expenditures on the project were as follows:
| January 1, 2021 | $ | 1,000,000 | |
| March 1, 2021 | 840,000 | ||
| June 30, 2021 | 480,000 | ||
| October 1, 2021 | 680,000 | ||
| January 31, 2022 | 630,000 | ||
| April 30, 2022 | 945,000 | ||
| August 31, 2022 | 1,620,000 | ||
On January 1, 2021, the company obtained a $3 million construction
loan with a 11% interest rate. Assume the $3 million loan is not
specifically tied to construction of the building. The loan was
outstanding all of 2021 and 2022. The company’s other
interest-bearing debt included two long-term notes of $4,800,000
and $6,800,000 with interest rates of 8% and 10%, respectively.
Both notes were outstanding during all of 2021 and 2022. Interest
is paid annually on all debt. The company’s fiscal year-end is
December 31.
Required:
1. Calculate the amount of interest that Mason
should capitalize in 2021 and 2022 using the weighted-average
method.
2. What is the total cost of the building?
3. Calculate the amount of interest expense that
will appear in the 2021 and 2022 income statements.
In: Accounting