Sheridan Ltd. is a private corporation reporting under ASPE. It has recorded all necessary adjusting entries at its fiscal year end, October 31, 2021. The following information has been taken from the adjusted trial balance:

All accounts have normal balances and total assets equal $732,000. Sheridan has a 20% income tax rate.

Prepare a multiple-step income statement for the year.

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List of Accounts

Prepare a statement of retained earnings for the year. (List items that increase retained earnings first.)

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List of Accounts

Prepare closing entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

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List of Accounts

Post the closing entries to the Income Summary and Retained Earnings accounts. (Post entries in the order of Journal entry presented in the previous part.)

1.

Silver Company makes a product that is very popular as a Mother’s Day gift. Thus, peak sales occur in May of each year, as shown in the company’s sales budget for the second quarter given below:

From past experience, the company has learned that 30% of a month’s sales are collected in the month of sale, another 60% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $410,000, and March sales totaled $440,000.

Required:

1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.

2. What is the accounts receivable balance on June 30th?

2.

Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic centimeters (cc) of solvent H300 are required to manufacture each unit of Supermix, one of the company’s products. The company now is planning raw materials needs for the third quarter, the quarter in which peak sales of Supermix occur. To keep production and sales moving smoothly, the company has the following inventory requirements:

The finished goods inventory on hand at the end of each month must equal 3,000 units of Supermix plus 25% of the next month’s sales. The finished goods inventory on June 30 is budgeted to be 19,250 units.

The raw materials inventory on hand at the end of each month must equal one-half of the following month’s production needs for raw materials. The raw materials inventory on June 30 is budgeted to be 99,375 cc of solvent H300.

The company maintains no work in process inventories.

A monthly sales budget for Supermix for the third and fourth quarters of the year follows.

Required:

1. Prepare a production budget for Supermix for the months July, August, September, and October.

3. Prepare a direct materials budget showing the quantity of solvent H300 to be purchased for July, August, and September, and for the quarter in total.

1.

Silver Company makes a product that is very popular as a Mother’s Day gift. Thus, peak sales occur in May of each year, as shown in the company’s sales budget for the second quarter given below:

From past experience, the company has learned that 30% of a month’s sales are collected in the month of sale, another 60% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $410,000, and March sales totaled $440,000.

Required:

1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.

2. What is the accounts receivable balance on June 30th?

2.

Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic centimeters (cc) of solvent H300 are required to manufacture each unit of Supermix, one of the company’s products. The company now is planning raw materials needs for the third quarter, the quarter in which peak sales of Supermix occur. To keep production and sales moving smoothly, the company has the following inventory requirements:

The finished goods inventory on hand at the end of each month must equal 3,000 units of Supermix plus 25% of the next month’s sales. The finished goods inventory on June 30 is budgeted to be 19,250 units.

The raw materials inventory on hand at the end of each month must equal one-half of the following month’s production needs for raw materials. The raw materials inventory on June 30 is budgeted to be 99,375 cc of solvent H300.

The company maintains no work in process inventories.

A monthly sales budget for Supermix for the third and fourth quarters of the year follows.

Required:

1. Prepare a production budget for Supermix for the months July, August, September, and October.

3. Prepare a direct materials budget showing the quantity of solvent H300 to be purchased for July, August, and September, and for the quarter in total.

1.The following information relates to the debt investments of Black Elk Petroleum Company:

On February 1, the company purchased 10% bonds of Gerber Co. having a par value of $300,000 at 100 plus accrued interest. Interest is payable April 1 and October 1.

On April 1, semiannual interest is received.

On July 1, 9% bonds of Target, Inc. were purchased. The bonds have a par value of $200,000 and were purchased at 100 plus accrued interest. Interest dates are June 1 and December 1.

On September 1, bonds with a par value of $60,000, purchased on February 1, are sold at 99 plus accrued interest.

On October 1, semiannual interest is received.

On December 1, semiannual interest is received.

On December 31, the fair value of the bonds purchased February 1 and July 1 are 95 and 93, respectively.

INSTRUCTIONS:

Prepare any journal entries you consider necessary, including year-end entries (December 31), assuming these are available-for-sale securities.

If Black Elk classified these as held-to-maturity investments, explain how the journal entries would differ from those in part (1).

2.Flourish & Botts, Inc. has the following portfolio of investment securities at September 30, 2017, its most recent reporting date

Investments Cost Fair Value Unrealized Gain(Loss)

Gambol & Japes 5,000 Shares $215,000 $200,000 $(15,000)

Borgin & Burks 3,500 Shares $133,000 $140,000 $7,000

Knockturn Alley 1,000 Shares $180,000 $179,000 $(1,000)

On October 10, 2017, the Gambol & Japes shares were sold at a price of $54/share. In addition, 3,000 shares of Eeylops Owl Emporium common stock were acquired for $54.50/share on November 2, 2017. The December 31, 2017, fair values were Borgin & Burks $106,000, Eeylops Owl Emporium $132,000, and Knockturn Alley $193,000.

Instructions:

Prepare the journal entries to record the sale, purchase, and adjusting entries related to the equity securities in the last quarter of 2017.

For the fair value adjustment related to the LAST quarter of 2017, create a schedule as the one shown above.

NOTE: There should be three entries – one for each of the highlighted dates. When you calculate the fair value adjustment as of December 31, 2017, remember to take into account the fair value adjustment that would have been recorded on September 30, 2017.

Co(II) was used as an internal standard to analyze a sample of Ti(IV) with atomic absorption spectroscopy (AAS). A standard mixture containing 1.40 μg Co/mL and 1.35 μg Ti/mL measured by AAS produced a signal-to-signal ratio of 2.41 Ti: 1.00 Co. A mixture was prepared by combining 4.50 mL of a Ti(IV) solution of unknown concentration with 4.00 mL of a 14.1 μg/mL solution of Co(II). The absorbance of the mixture at the Ti(IV) wavelength was 0.175 and the absorbance at the Co(II) wavelength was 0.187. Determine the concentration, in moles per liter, of Ti(IV) in the original unknown solution.

Co(II) was used as an internal standard to analyze a sample of Ti(IV) with atomic absorption spectroscopy (AAS). A standard mixture containing 2.50 μg Co/mL and 2.47 μg Ti/mL measured by AAS produced a signal-to-signal ratio of 2.60 Ti: 1.00 Co. A mixture was prepared by combining 5.00 mL of a Ti(IV) solution of unknown concentration with 4.00 mL of a 12.4 μg/mL solution of Co(II). The absorbance of the mixture at the Ti(IV) wavelength was 0.119 and the absorbance at the Co(II) wavelength was 0.225. Determine the concentration, in moles per liter, of Ti(IV) in the original unknown solution.

Use the following to answer questions 20-21:

LeGrand Co. sells office supplies and equipment to law firms and other high-end clients. Their accountant has provided you with the following Balance Sheet for the company for 2005.

The company's loan is not due for 3 more years. However, they are required to pay off 20% of their mortgage each year. The company has decided that they should list their PPE accounts at historical cost, rather than as net amounts. They have also decided to combine all of the accumulated depreciation into one account on the balance sheet. LeGrand issued their $650,000 bond at face value on October 1st. The bond is semi-annual (i.e. LeGrand must pay interest every 6 months) with an 8% annual interest rate. When the auditor checked the numbers given above, they found that LeGrand had yet not recognized any interest expense on the bond.

MMM (Mickey Mouse Manufacturing) applies manufacturing overhead at a rate of 150% of direct labor cost. During October MMM incurred $40,000 of direct materials cost, $80,000 of direct labor cost and $120,000 of manufacturing overhead costs. What is the amount of over or under applied manufacturing overhead for October?