Web Wizard, Inc., has provided information technology services for several years. For the first two months of the current year, the company has used the percentage of credit sales method to estimate bad debts. At the end of the first quarter, the company switched to the aging of accounts receivable method. The company entered into the following partial list of transactions during the first quarter.

1. During January, the company provided services for $41,000 on credit.
2. On January 31, the company estimated bad debts using 2 percent of credit sales.
3. On February 4, the company collected $20,500 of accounts receivable.
4. On February 15, the company wrote off a $150 account receivable.
5. During February, the company provided services for $31,000 on credit.
6. On February 28, the company estimated bad debts using 2 percent of credit sales.
7. On March 1, the company loaned $2,600 to an employee, who signed a 6% note, due in 6 months.
8. On March 15, the company collected $150 on the account written off one month earlier.
9. On March 31, the company accrued interest earned on the note.
10. On March 31, the company adjusted for uncollectible accounts, based on an aging analysis (below). Allowance for Doubtful Accounts has an unadjusted credit balance of $1,210.

1. For items (a)–(j), analyze the transaction to determine effects on specific financial statement accounts and the overall accounting equation. (Enter any decreases to Assets, Liabilities, or Stockholders Equity with a minus sign. Do not round intermediate calculations.)

2. Prepare the journal entries for items (a)–(j). (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.)

3. Show how Accounts Receivable, Notes Receivable, and their related accounts would be reported in the current assets section of a classified balance sheet at the end of the quarter on March 31. (Do not round intermediate calculations.)

4. Sales Revenue and Service Revenue are two income statement accounts that relate to Accounts Receivable. Name two other accounts related to Accounts Receivable and Notes Receivable that would be reported on the income statement and indicate whether each would appear before, or after, Income from Operations.

Advanced Accounting - Chapter 12

Exercise 2 - Anticipating the impact on current-period tax rates due to forecasted events.

Waypine Enterprises reported a pretax operating loss of $84,000 in 2014, its first year of operations, and recognized a tax benefit of $6,000, based on the assumption that $40,000 of the loss could be offset against future pretax income. Management anticipates that there will be pretax operating income in the first six months of 2015 of $60,000 traceable to existing operations. However, additional income (loss) for the year is dependent on which of several strategies the company begins to pursue in the second quarter of 2015. Those strategies are as follows:

Strategy A—Existing operations would generate pretax income of $30,000 for the balance of the year and a new operating unit would begin operations in the second quarter of 2015, with projected pretax operating income (loss) of ($85,000), ($40,000), and ($20,000) for 2015 quarters 2 through 4, respectively. It is more likely than not that the operating units would generate pretax operating income of $30,000 in each of the next two years.

Strategy B—Existing operations would generate pretax loss of ($30,000) for the balance of the year and a 40% interest would be acquired in a limited liability company (LLC). The 40% interest would result in Waypine recognizing pretax income (loss) of ($40,000), $16,000, and $20,000 for 2015 quarters 2 through 4, respectively. It is likely that Waypine would recognize pretax operating income of $30,000 in 2016, traceable to this investment. Furthermore, it is anticipated that Waypine would dispose of its 40% interest in late 2016, resulting in a recognized gain of approximately $35,000.

Strategy C—Existing operations would generate pretax income of $30,000 for the balance of the year and construction would begin on a new research and development (R&D) center. The R&D center would become operational in the third quarter of 2015 and generate net licensing pretax income of $50,000 in 2015, along with income tax credits of $5,000.

Assume that the statutory tax rates in 2015 are 15% on the first $50,000 of income, 25% on the next $50,000 of income, and 30% on all remaining income. Calculate the estimated effective tax rate to be applied to income in the first six months of 2015, given each of the above strategies.

Note: Students should be reminded that if the tax benefit associated with prior-period operating losses is actually different from what was originally anticipated, such differences would be incorporated into the current-period effective tax rate.

An inexperienced accountant prepared this condensed income statement for Simon Company, a retail firm that has been in business for a number of years.

SIMON COMPANY

Income Statement For the Year Ended December 31, 2017

Prepare a correct multiple-step income statement.

Revenues

Net sales $850,000

Other revenues 22,000

Cost of goods sold 555,000

Gross profit 317,000

Operating expenses

Selling expenses 109,000

Administrative expenses 103,000

Net earnings $105,000

As an experienced, knowledgeable accountant, you review the statement and determine the following facts.

1. Net sales, as presented, consist of sales $911,000, less freight-out on merchandise sold $33,000, and sales returns and allowances $28,000.

2. Otherrevenues,aspresented,consistofsalesdiscounts$18,000andrentrevenue$4,000.

3. Selling expenses, as presented, consist of salespersons’ salaries $80,000, depreciation on equipment $10,000, advertising $13,000, and sales commissions $6,000. The com- missions represent commissions paid. At December 31, $3,000 of commissions have been earned by salespersons but have not been paid. All compensation should be recorded as Salaries and Wages Expense.

4. Administrative expenses, as presented, consist of office salaries $47,000, dividends $18,000, utilities $12,000, interest expense $2,000, and rent expense $24,000, which includes prepayments totaling $6,000 for the first quarter of 2018.

Instructions

Prepare a correct detailed multiple-step income statement. Assume a 25% tax rate.

Discount Furniture Pty Ltd manufactures a variety of desks, chairs, tables and shelf units which are sold to public school systems throughout Queensland. The accountant of the company’s School Desk Division is currently preparing a budget for the first quarter of 2018. The following sales forecast has been made by the division's sales manager.

          January 
   5,000 desk and chair sets

          February 
   6,000 desk and chair sets

          March 
   7,500 desk and chair sets

          April 
    7,500 desk and chair sets

Each desk and chair set requires 10 metres of pine planks and 1.5 hours of direct labour. Each set sells for $50. Pine planks cost $0.50 per metre and the division ends each month with enough wood to cover 10 per cent of the next month's production requirements. The division incurs a cost of $20.00 per hour for direct labour wages and fringe benefits. The division ends each month with enough finished goods inventory to cover 20 per cent of the next month's sales. Also, assume that April's production will total 8,000 units.

Required:

(a) Prepare the Production Budget for Discount Furniture Pty Ltd for January, February and March, using the information provided.

(b) Prepare the Direct Materials Purchases Budget for January February, and March, using the information provided. 


(c) Outline three purposes of preparing budgets such as the Production and Direct Materials Purchases budgets considered here. 


1.Capital investment, labor force and its productivity, and technology are three key elements that determine the total output of an economy. True or False

2.In the long run, when capital is abundant, the marginal benefit of capital investment is decreasing, so technological changes are more important in supporting economic growth. True or False

3.GDP calculates the total market values of newly produced final goods and services to represent the size of the economy. True or False The labor force participation rate shows what percentage of the working-age population is in the labor market. True or False

4.The unemployment rate indicates what percentage of the labor force in the labor market is currently unemployed. True or False

5.When a country opens its economy to the rest of the world, if the original domestic price is lower than the global price, an export will incur, which drives up the domestic price to the global level. True or False

6.When a country opens its economy, if the original domestic price is higher than the global price, imports will incur which drives the domestic price to move lower to the global price.True or False

7.When the domestic price of a good is higher than the global price of the same good, what happens in the context of an open economy? A. It will increase domestic sales and also the domestic price. B. It will attract domestic sellers to sell to the international market. The additional sales drive the domestic price even higher. C. The domestic sales and price will both go down. D. It will attract international sellers, which will lead to import.

8.The additional supply will lower the domestic price to the same level as the global price. A foreign exchange system that allows the exchange market to determine exchange rates but with restrictions on daily trade volume and exchange rate movement is called: A. free floating system. B. pegging system. C. managed floating system. D. fixed system.

9.A local gas station shows that the price of regular unleaded is $4.19 a gallon. What is the function of money here? A. medium of exchange B. store of value C. unit of account D. standard of deferred payment

10.According to the quantity theory of money, which of the following statements is NOT true? A. Else the same, the higher the velocity of circulation, the less money needed for the same amount of transactions. B. Else the same, inflation will lead to larger quantity of money needed for an economy. C. Else the same, the higher the price level, the lower the demand for money. D. Else the same, a larger real GDP generally requires more money in circulation.

11.If a country has tax revenues of $7 trillion and government expenditures of $7 trillion, its government has a(n): A. unknown situation. B. budget surplus. C. budget deficit. D. balanced budget.

12.In recent months, the exchange rate between the Chinese Yuan and the U.S. dollar moved from 6.1 Yuan/USD to 6.3 Yuan/USD. Which currency depreciated? A. Neither B. Both C. Dollar D. Yuan Katy sets up a savings account to manage money for her child's education.

13.What is the function of money here? A. standard of deferred payment. B. medium of exchange. C. store of value. D. unit of account. Micheal, a recent Shepherd graduate, financed his studies with a student loan.

14.Now he works as a trainer and makes monthly payments to the loan. What is the function of money here? A. medium of exchange B. unit of account C. standard of deferred payment D. store of value Most economic policies are a two-edge sword.

15.The overuse of a policy may cause significant side effects. The side effects of an expansionary fiscal policy include: A. government budget deficit. B. potential inflation. C. that the government may have too much influence on the market economy, and its efficiency is always of question. D. all of the above.

16.One year ago, the federal discount rate (a key interest rate) was 2.5%, and the current federal discount rate is 0.5%. Such adjustment aims to: A. decrease the monetary base. B. increase the cost for firms to borrow from the Fed. C. balance federal budget. D. encourage lending.

17.The Short-Run Phillips Curve shows: A. that monetary policy has an inverse effect on the unemployment rate and the inflation rate. B. monetary policy is effective in moving the real economy in the short run since it can affect the unemployment rate. C. There is a negative relationship between the inflation rate and the unemployment rate in the short run. D. all of the above.

18.The government expenditure multiplier refers to: A. that government spending has little impact on national economy. B. that each additional dollar spent by the government will lead to a less than one dollar increase in GDP. C. that government spending leads to less consumer spending. D. that government spending has a magnified effect on national economy.

19.To serve as a commodity money, an object must satisfy which of the following requirements? A. It has to be a commodity or token, which can be divided into small parts. B. It has to be generally accepted by the market participants to trade for goods and services. C. It has to be used as a method of settling a debt or payment. D. all of the above.

20.To serve as a commodity money, an object must satisfy which of the following requirements? A. It has to be a commodity or token, which can be divided up into small parts. B. It has to be generally accepted by the market participants to trade for anything and everything. C. It has to be used as a method of settling a debt or payment. D. All of the above.

21.Tom bought 6 oranges for 3 dollars. Money serves the function of: A. standard of deferred payment. B. store of value. C. medium of exchange. D. unit of account. What is (are) the main objective(s) of fiscal policy: A. higher economic growth. B. full employment. C. low inflation. D. all of the above.

22.Which branch of the Fed oversees most financial institutions in West Virginia? A. Richmond B. Cleveland C. Washington DC D. Philadelphia

23.Which of the following items is NOT a form of money? A. Traveler's checks B. Coins C. Treasury bonds D. Cash Which of the following statements about the balance of payments in an open economy is correct? A. It includes current accounts, financial accounts and capital accounts. B. It is always in balance. C. A deficit of current accounts (i.e., trade deficit) is always balanced by a surplus in financial accounts (i.e., net investments in domestic assets). D. all of the above.

24.Which of the following statements is INCORRECT about M1 and M2? A. M2 includes M1, savings deposits, time deposits and money market funds. B. M1 and M2 are mutually exclusive. C. M2 is more broadly defined than M1. D. M1 is more liquid than M2.

25.Which of the following statements is NOT true? A. An increase in government spending directly increases the aggregate demand for goods and services. B. Lower taxes reduces business costs and increases aggregate supply. C. Although government spending may have a crowding-out effect on private investment and spending in the same field, the positive impact on the overall economy is greater. D. all of the above are true.

The following information applies to the questions displayed below.] Iguana, Inc., manufactures bamboo picture frames that sell for $20 each. Each frame requires 4 linear feet of bamboo, which costs $1.50 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages $12 per hour. Iguana has the following inventory policies: Ending finished goods inventory should be 40 percent of next month’s sales. Ending raw materials inventory should be 30 percent of next month’s production. Expected unit sales (frames) for the upcoming months follow: March 360 April 420 May 470 June 570 July 545 August 595 Variable manufacturing overhead is incurred at a rate of $0.20 per unit produced. Annual fixed manufacturing overhead is estimated to be $7,200 ($600 per month) for expected production of 4,000 units for the year. Selling and administrative expenses are estimated at $650 per month plus $0.50 per unit sold. Iguana, Inc., had $10,800 cash on hand on April 1. Of its sales, 80 percent is in cash. Of the credit sales, 50 percent is collected during the month of the sale, and 50 percent is collected during the month following the sale. Of raw materials purchases, 80 percent is paid for during the month purchased and 20 percent is paid in the following month. Raw materials purchases for March 1 totaled $2,400. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $320 in depreciation. During April, Iguana plans to pay $4,100 for a piece of equipment.

1.

PA8-1 Preparing Operating Budgets [LO 8-3a, b, c, d, e, f, g]

Required:
Compute the following for Iguana, Inc., for the second quarter (April, May, and June).     

april may june

1 Budgeted sales revenue   

2 budgeted production in unites

3 budgeted cost of raw material purchases

4 budgeted direct labor cost

5 budgeted manufacturing overhead

6 budgeted cost of goods sold

7 total budgeted selling and adm. Espenses

2.

PA8-2 Preparing Budgeted Income Statement [LO 8-3h]

Required:
Complete Iguana's budgeted income statement for quarter 2. (Round cost per unit in intermediate calculations and final answers to 2 decimal places.)

IGUANA,INC

BUDGETED INCOME STATEMENT

FOR THE QUARTER ENDING JUNE

APRIL MAY JUNE 2ND QUARTER TOTAL

1.

2.

3.

4.

BUDGETED GROSS MARGIN

1.

2.

3.

BUDGETED NET OPERATING INCOME

3.

Required:
1. Compute the budgeted cash receipts for Iguana. (Do not round your intermediate calculations. Round final answers to 2 decimal places.)
APRIL MAY JUNE 2ND QUATER TOTAL

BUDGETED CASH RECEIPTS


2. Compute the budgeted cash payments for Iguana. (Do not round your intermediate calculations. Round final answers to 2 decimal places.)
APRIL MAY JUNE 2ND QUARTER TOTAL

BADGETED CASH PAYMENTS

    

3. Prepare the cash budget for Iguana. Assume the company can borrow in increments of $1,000 to maintain a $10,000 minimum cash balance. (Leave no cell blank enter "0" wherever required. Round your answers to 2 decimal places.)

APRIL MAY JUNE 2ND QUARTER TOTAL

Beginning cash balance

plus: budgeted cash receipts

less: budgeted cash payments

preliminary cash balance

cash borrowed/repaid

ending cash balance

i need exact answer. i appreciate it.

READREAD THE ARTICLE BELOWBELOW. FROM THE WALL STREET.

describe all relevant informationinformation. telling the main thing you take away from the articlearticle and how it applies to globalization.

HANGZHOU, China -- When Michelle Xian wandered into one of the fast-food restaurants at a shopping mall here on a recent weekday, she didn't realize it was a KFC.

The modern décor featured an open kitchen and hanging plants, and the menu included tuna-and-pesto paninis and quinoa-and-corn salads. Customers were busy placing orders via smartphone, using QR codes printed on tables, or through a facial-recognition system that matches their images to their Alipay digital wallets.

"I don't normally go to KFC because it's not that healthy," said Ms. Xian, 30 years old, who ordered a chicken sandwich before being told where she was. "This is more aligned with new trends."

The KFC concept store, known as KPRO, is a testing ground for owner Yum China Holdings as it tries to capture a new audience and drive growth in the wake of its spinoff from U.S. parent Yum Brands Inc. a year ago last week. In a strategic break from its American counterpart, which is going back to finger-lickin' basics in the U.S., Yum China is pushing healthier offerings and technology.

Since the spinoff, China's biggest fast-food chain, with more than 7,700 KFC and Pizza Hut stores, has bought a controlling stake in an online food-delivery company, partnered with China's most-popular digital wallet service and improved its smartphone apps.

Yum China's 63-year-old chief executive, Muktesh "Micky" Pant, concedes he was skeptical of the emphasis on apps at first, telling his team they were too complicated.

"They very politely told me to just hang on, and I'm glad I didn't interfere," he said in a recent interview. "People have far more apps on their phones, and they are able to navigate them effectively."

Mobile payments at Yum China's restaurants represented 45% of sales in the quarter ended Aug. 31, up from 17% in all of 2016. Delivery orders, most of which come from online apps, were 14% of sales in the same period, up from 10% last year. Its two-year-old loyalty program, meanwhile, has become one of the largest in the world, with more than 127 million members -- dwarfing industry leader Panera Bread Co. in the U.S., which has about 25 million members.

Net income in the first eight months of this year rose 19% over the same period a year earlier, while system sales, which include revenue from franchises and joint ventures, grew 10% in the latest quarter.

"To the U.S. investor, the numbers look meteoric," said Sara Senatore, an analyst at Sanford Bernstein. Shares in Yum China are up more than 65% since the company was listed on the New York Stock Exchange in November 2016.

"But Yum, broadly speaking, is holding its own," she added, keeping pace with Chinese chain restaurant sales.

One not-so-bright spot for Yum China is Pizza Hut. Sales at its stores open at least a year were flat in the most recent quarter, compared with 7% sales growth at KFC.

Yum Brands was the first major Western fast-food company to enter China, beating McDonald's Corp. by three years when it opened a KFC near Tiananmen Square in 1987. Its long success was dimmed in recent years by food-safety scares and stronger competition, leading the parent company to spin it off and instead collect a percentage of sales.

"Food safety and nutrition is a greater consideration for Chinese consumers, while speed of service and authenticity is more important to U.S. consumers," said Morningstar analyst R.J. Hottovy in an email. Technology also figures heavily in Yum China's strategy. The company has partnered with Alibaba Group Holding Ltd. affiliate Ant Financial to offer its "smile to pay" system at the KPRO in Hangzhou, Alibaba's headquarters city.

Customers go to a self-serve kiosk to choose items on a video screen, then pay by looking at a camera, provided they've enabled facial-recognition on their Alipay app. For security, they must also enter their phone number.

Orion Designs specialises in making one type of wedding dress – the Diana. In 2017 the average monthly sales figures were:

Units Selling Price

Diana              100                 $1,200

Orion Designs intends to lower the selling price per unit for the Diana dress due to increased competition to $1,000 per unit. It is hoped that this will increase sales in January by 20% compared to the December 2017 level and again by a further 20% from January to February 2018 and then remain at that level for the rest of the year. 80% of sales are on credit, and the remainder cash. Orion Design offers a 2% discount for credit customers who pay within the month and 10% of customers do so. Another 70% pay in the month following the sale and the remaining customers pay 2 months following the sale. Orion Designs does not have any problems with bad debts.

Each unit requires the following materials:

                                    Diana              Cost

Plain Fabric                5 m2               $10 per m2

Silk Fabric                  10 m               $2 per m

Cotton String             3 m2               $3 per m2

Sequins                      600               $0.02 each

Materials are paid for in the month after purchase. The amount of accounts payable at 31 December 2017 was $18,266.

Direct Labour required (at $15 per hour)

Diana

Labour hours            2        

Labour is paid for as incurred (in the month when the work is done).

Opening materials inventories:

Plain Fabric                100 m2

Silk Fabric                  10 m

Cotton String 20 m2

Sequins                     600

The desired materials ending inventory is 50% of that required for the next month’s production.

Opening finished goods inventories:

Diana

Finished dresses       20

For 2018 the desired ending finished goods inventory is equal to the 50% of following month’s sales in units.

Variable manufacturing overheads are expected to be $22 per unit manufactured in a month. These are paid for as incurred. Fixed manufacturing overheads are expected to be $13,000 per month (including $500 for depreciation). These are paid for as incurred. Other expenses are estimated at $50,000 per month, also paid as incurred. A $20,000 loan will be repaid in February. A $6,000 tax expenses will be paid in March. Interest received on an investment is due to be paid into the business bank account in January, totalling $300. The cash at bank balance at 31st December was a credit balance (overdraft) of $40,000.

Required:

a) Prepare a sales budget in units and dollars for the 3 months and the total

quarter for the Diana dresses.

b) Prepare a production budget in units for the 3 months and the total quarter for the Diana dresses.

c) Prepare a materials usage budget in units for each of the four materials

(separate budgets) and calculate the dollar purchases for each, showing the 3

months and the total quarter for the Diana dresses.

d) Calculate the total value of materials purchases each month.

e) Prepare a direct labour budget.

f) Prepare a schedule of collection of sales.

g) Prepare a cash budget showing each month and the quarter total.

Required: Prepare a master budget for the San Jacinto Emporium Company for the fourth quarter of 2017. The following component budgets must be included: 1. Sales Budget 2. Cost of Goods Sold, Inventory and Purchases Budget 3. Operating Expense Budget 4. Budgeted Income Statement 5. Schedule of Expected Cash Collections 6. Schedule of Expected Cash Disbursements - Merchandise Purchases 7. Schedule of Expected Cash Disbursements - Operating Expenses 8. Combined Cash Budget The San Jacinto Emporium Company is a merchandising business located in Houston, Texas. The owners understand that accurate budgeting will help obtain this goal. The company is completing its third year of operations and is preparing to build its master budget for the fourth quarter of the year. The budget will detail each month’s activity and the total for the quarter. The master budget will be based on the following information: 1. Sales were budgeted at $202,000 for September. Expected sales are $208,000 for October, $207,000 for November, $210,000 for December, and $204,000 for January 2018. The gross margin is 40% of sales. Sales are projected to be 80% in cash and 20% on credit. Credit sales are collected in the month following the sale. The September accounts receivable are a result of the September credit sales. There are no bad debts. 2. Each month’s ending inventory should equal 75% of the next month’s budgeted cost of goods sold. Merchandise Inventory Purchases are paid as follows; 85% of a month’s inventory purchases are paid for in the month of purchase; the remaining 15% is paid for in the following month. The accounts payable at September 30 are the result of September purchases of inventory. 3. Monthly operating expenses are as follows: commissions are 10% of sales; rent is $3,000 per month, other operating expenses (excluding depreciation) are 15% of sales. Assume these expenses are paid in cash each month. Deprecation is $1,500 per month. 4. November equipment purchases cost $8,000, and December equipment purchases cost $3,000. All equipment purchases are paid for in cash in the month purchased. 5. Management would like to maintain a minimum cash balance of at least $50,000 at the end of each month. The company has an agreement with a local bank that allows them to borrow in increments of $1,000 at the end of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded (only paying interest on the principal). They would, as far as it is able, repay the loan plus accumulated interest in the last month of the quarter. The projected balance sheet as of September 30, is as follows: Assets September 30 Cash $12,000.00 Accounts Receivable 40,400.00 Inventory 93,600.00 Plant & Equipment, net 121,750.00 Total assets $267,750.00 Liabilities & Equity Accounts Payable $18,585.00 Retained Earnings 249,165.00 Total liabilities & equity $267,750.00

**** with Excel work sheet please