Question text

Company began construction of a machine on 1/1/2021. Company borrowed $700,000 at 10% on 1/1/2021 for this project. The project was under construction during the entire calendar year. Expenditures were made on the project during the year:

Company also had $1,000,000 outstanding at 12% during the entire year.

Required:

Calculate Avoidable and Actual Interest. Show work to receive credit.

Larkspur Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,920,000 on March 1, $1,200,000 on June 1, and $3,070,300 on December 31.

Larkspur Company borrowed $1,041,900 on March 1 on a 5-year, 13% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 5-year, $2,227,300 note payable and an 11%, 4-year, $3,799,000 note payable. Compute avoidable interest for Larkspur Company. Use the weighted-average interest rate for interest capitalization purposes

On January 1, 2018, Dreamworld Co. began construction of a new warehouse. The building was finished and ready for use on September 30, 2019. Expenditures on the project were as follows:

Dreamworld had the following debt obligations outstanding during both years:

Construction loan, 10%             $500,000

             Long-term note, 12%                      $2,500,000

Required: What would Dreamworld's capitalized interest be in 2018?

1.On January 15, 2016, Bravo Company purchased $1,500 of construction supplies to last for 3 months on account, from the Zulu Company. Prepare Bravo Company's general journal entry (without explanation).

2. On January 15, 2016, Bravo Company purchased $3,000 of construction supplies to last for 3 months, from the Zulu Company. Bravo paid for half of the supplies with cash and the remainder on account.

3. On January 31, 2016, Bravo withdrew $3,000 from the company. Prepare the general journal entry (without explanation) needed.

We wish to study the difference in attitudes between urban residents versus suburban residents in a metropolitan area as these attitudes relate to the proposed construction of a nuclear plant in the area. We obtain a random sample of 80 urban residents and find that 60 of these residents favor the construction of the plant. Independently, we obtain a random sample of 100 suburban residents, finding that 65 of these residents favor construction of the plant. Select the correct expression for the margin of error of the 90% confidence interval for p1 − p2, where p1 denotes the population proportion for urban residents and p2 denotes the population proportion for suburban residents.

a) 1.645 ∙ √ .75 80 + .65 100

b) 1.645 ∙ √ (0.75) 2 80 + (0.65) 2 100

c) 1.645 ∙ √ (.75)(.25) 80 + (.65)(.35) 100

d) 1.960 ∙ √ .75 80 + .65 100

e) 1.960 ∙ √ (0.75) 2 80 + (0.65) 2 100

f) 1.960 ∙ √ (.75)(.25) 80 + (.65)(.35) 100

Raleigh Department Store uses the conventional retail method for the year ended December 31, 2016. Available information follows: The inventory at January 1, 2016, had a retail value of $35,000 and a cost of $29,050 based on the conventional retail method. Transactions during 2016 were as follows: Cost Retail Gross purchases $ 154,950 $ 390,000 Purchase returns 5,500 30,000 Purchase discounts 4,000 Gross sales 341,000 Sales returns 5,000 Employee discounts 4,000 Freight-in 30,500 Net markups 15,000 Net markdowns 30,000 Sales to employees are recorded net of discounts. The retail value of the December 31, 2017, inventory was $46,800, the cost-to-retail percentage for 2017 under the LIFO retail method was 80%, and the appropriate price index was 104% of the January 1, 2017, price level. The retail value of the December 31, 2018, inventory was $40,660, the cost-to-retail percentage for 2018 under the LIFO retail method was 79%, and the appropriate price index was 107% of the January 1, 2017, price level.

Required: 1. Estimate ending inventory for 2016 using the conventional retail method. 2. Estimate ending inventory for 2016 assuming Raleigh Department Store used the LIFO retail method. 3. Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2017. Estimating ending inventory for 2017 and 2018.

Variable Costs, Contribution Margin, Contribution Margin Ratio

Super-Tees Company plans to sell 18,000 T-shirts at $21 each in the coming year. Product costs include:

Direct materials per T-shirt   $7.35
Direct labor per T-shirt   $1.47
Variable overhead per T-shirt   $0.63
Total fixed factory overhead   $40,000
Variable selling expense is the redemption of a coupon, which averages $1.05 per T-shirt; fixed selling and administrative expenses total $19,000.

Required:

1. Calculate the following values:
Round dollar amounts to the nearest cent and round ratio values to three decimal places (express the ratio as a decimal rather than a percentage).

a. Variable product cost per unit   
b. Total variable cost per unit   
c. Contribution margin per unit   
d. Contribution margin ratio
e. Total fixed expense for the year

2. What if the per unit selling expense increased from $1.05 to $2.25? Calculate new values for the following:
Round dollar amounts to the nearest cent and round ratio values to four decimal places (express the ratio as a decimal rather than a percentage):

a. Variable product cost per unit   
b. Total variable cost per unit
d. Contribution margin ratio   
e. Total fixed expense for the year   

Raleigh Department Store uses the conventional retail method for the year ended December 31, 2016. Available information follows:

The inventory at January 1, 2016, had a retail value of $51,000 and a cost of $38,060 based on the conventional retail method.

Transactions during 2016 were as follows:

Sales to employees are recorded net of discounts.

The retail value of the December 31, 2017, inventory was $60,180, the cost-to-retail percentage for 2017 under the LIFO retail method was 75%, and the appropriate price index was 102% of the January 1, 2017, price level.

The retail value of the December 31, 2018, inventory was $51,450, the cost-to-retail percentage for 2018 under the LIFO retail method was 74%, and the appropriate price index was 105% of the January 1, 2017, price level.

Required:
1. Estimate ending inventory for 2016 using the conventional retail method.
2. Estimate ending inventory for 2016 assuming Raleigh Department Store used the LIFO retail method.
3. Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2017. Estimating ending inventory for 2017 and 2018.