Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted information pertains to 2016:
| Denominator volume-number of units | 8,000 |
| Denominator volume-percent of capacity | 80% |
| Denominator volume-standard direct labor hours | 24,000 |
| Budgeted variable factory overhead cost at the denominator volume | $103,200 |
| Total standard factory overhead rate per direct labor hour | $15.10 |
During 2016, Bluecap worked 28,000 direct labor hours and manufactured 9,600 units. The actual factory overhead was $14,000 greater than the flexible budget amount for the units produced, of which $6,000 was due to fixed factory overhead. In preparing a budget for 2017 Jensen decided to raise the level of operation to 90% of capacity, to manufacture 9,000 units at a budgeted total of 27,000 direct labor hours.
a. Compute variable overhead variances for 2016:
b. Compute fixed overhead variances for 2016:
c. Under the assumption that the total budgeted fixed overhead for 2017 is the same as it was for 2016, what is the standard fixed overhead application rate per direct labor hour for Bluecap Co. for 2017?
d. Must be done in excel and show all work.
In: Accounting
At year-end 2016, Wallace Landscaping’s total assets were $1.5 million and its accounts payable were $395,000. Sales, which in 2016 were $2.0 million, are expected to increase by 30% in 2017. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to $420,000 in 2016, and retained earnings were $260,000. Wallace has arranged to sell $160,000 of new common stock in 2017 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2017. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its profit margin on sales is 6%, and 35% of earnings will be paid out as dividends.
What was Wallace's total long-term debt in 2016? Round your
answer to the nearest dollar.
$
What were Wallace's total liabilities in 2016? Round your answer to
the nearest dollar.
$
How much new long-term debt financing will be needed in 2017? (Hint: AFN - New stock = New long-term debt.) Round your answer to the nearest dollar.
In: Finance
ABSORPTION AND VARIABLE (DIRECT) COSTING
Facer Electronics produces high quality cellphone charging cords,
and in the 2016 calendar year, it produced 9000 saleable charging
cords. In the same year, the company achieved sales of 11,000
charging cords, at a per unit sales price of $18. The firm had 3000
cords in stock on 1 January 2016. Facer Electronics uses normal
costing and a standard costing system. Normal volume of production
was the same for the last three years.
Fixed manufacturing overhead costs for the year were budgeted at
$30,000 and these costs were allocated at a rate of $3/charging
cord. Other manufacturing costs were $5 per cord for direct
materials, $3 per cord for direct labour and $2 per cord for other
variable manufacturing costs. Marketing and administration costs
for 2016 amounted to $10,000 in fixed costs, and $2 per cord
sold.
Required:
(a) Prepare an absorption costing income statement for Facer
Electronics for the calendar year of 2016. Assume that there are no
taxes, or price, spending or efficiency variances.
(b) What would be the 2016 profit under the variable (direct)
costing method? Explain why your profit in (a) and (b) are the same
or different.
In: Accounting
Missing Statement Items, Available-for-Sale Securities
Oceanic Airways makes investments in available-for-sale securities. Selected income statement items for the years ended December 31, 2016 and 2017, plus selected items from comparative balance sheets, are shown in the income statement and balance sheet below: (There were no dividends.)
Determine the missing items. If required, use the minus sign to indicate a net or operating loss, unrealized losses, or a credit balance in the valuation allowance account.
| Oceanic Airways | ||
| Selected Income Statement Items | ||
| For the Years Ended December 31, 2016 and 2017 | ||
| 2016 | 2017 | |
| Operating Income (Loss) | $ | $ |
| Gain (Loss) from Sale of Investments | 4200 | (8400) |
| Net Income (Loss) | $ | $(11550) |
Feedback
| Oceanic Airways | |||
| Selected Balance Sheet Items | |||
| December 31, 2015, 2016, and 2017 | |||
| Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2017 | |
| Assets | |||
| Available-for-Sale Investments, at Cost | $81900 | $71400 | $99750 |
| Valuation Allowance for Available-for-Sale Investments | 5250 | (6300) | |
| Available-for-Sale Investments, at Fair Value | |||
| Stockholders' Equity | |||
| Unrealized Gain (Loss) on Available-for-Sale Investments | (7,350) | ||
| Retained Earnings | $172200 | $243600 | $ |
In: Accounting
Rachel Corporation was started in 2015 with a cash investment of $20,000. You are presented with the following accounts for Rachel (in thousands):
| 2016 | 2015 | 2016 | 2015 | ||
| Net Sales | 400 | 350 | Retained earnings | 180 | 130 |
| Cost of Goods Sold | 140 | 125 | Inventory | 118 | 85 |
| Tax expense | 55 | 50 | Operating expenses | 40 | 35 |
| Long-term debt | 50 | 0 | Accounts payable | 67 | 45 |
| Allowance for doubtful accounts | 2 | 1 | Interest expense | 15 | 0 |
| Cash | 25 | 5 | Long-term deferred taxes | 8 | 5 |
| Depreciation expense | 50 | 45 | Plant and equipment (net) | 200 | 100 |
| Short-term notes payable | 25 | 0 | Accounts receivable (net) | 7 | 10 |
Prepare a multiple-step income statement for both 2016 and 2015.
Prepare a classified balance sheet for both 2016 and 2015.
Was there a dividend paid in 2016? If so, what was the amount of the dividend?
For the most recent year, prepare the cash flow identity for Rachel Corporation.
For the most recent year, prepare the statement of cash flows for Rachel Corporation.
What conclusions might be drawn from what you have compiled?
In: Finance
Braddock Inc. had the following long-term receivable account balances at December 31, 2016.
Note receivable from sale of division $1,500,00
Note receivable from officer $400,000
Transactions during 2017 and other information relating to Braddocks long-term recievables were as follows.
1. The $1,500,000 note receivable is dated May 1, 2016, bears interest at 9%, and represents the balance of the consideration recieved from the sale of Braddock's electronics divison to New York Company. Principal payments of $500,000 plus appropriate interest are due on May 1, 2017, 2018, and 2019. The first principal and interest payment was made on May 1, 2017. Collection of the note installments is reasonably assured.
a) Prepare all journal entries related to this note for 2016 and 2017. For the journal entry to record the note issuance credit "Miscellaneous Accounts."
b) How much interest revenue would Braddock report related to this note in 2016?
c) How much interest revenue would Braddock report related to this note in 2017?
d) How much interest receivable would Braddock report reltaed to this note in 2016?
e) What is the current portion of this Notes Receivables at 12/31/2017?
In: Accounting
At December 31, 2016, Stacy McGill Corporation reported current assets of $370,000 and current liabilities of $200,000. The following items may have been recorded incorrectly.
1. Goods purchased costing $22,000 were shipped f.o.b. shipping point by a supplier on December 28. McGill received and recorded the invoice on December 29, 2016, but the goods were not included in McGill’s physical count of inventory because they were not received until January 4, 2017.
2. Goods purchased costing $15,000 were shipped f.o.b. destination by a supplier on December 26. McGill received and recorded the invoice on December 31, but the goods were not included in McGill’s 2016 physical count of inventory because they were not received until January 2, 2017.
3. Goods held on consignment from Claudia Kishi Company were included in McGill’s December 31, 2016, physical count of inventory at $13,000.
4. Freight-in of $3,000 was debited to advertising expense on December 28, 2016.
Required:
a.) Compute the current ratio based on McGill's Balance Sheet
b.) Recompute the current ration after corrections are made.
c.) By which amount will income (before taxes) be adjusted up or down as a result of the corrections?
In: Accounting
Blaylock Company provided the following partial comparative balance sheets and the income statement for 2016.
|
Blaylock Company |
|
Comparative Balance Sheets |
|
At December 31, 2015 and 2016 |
|
1 |
2015 |
2016 |
|
|
2 |
Current assets: |
||
|
3 |
Accounts receivable |
$750,000.00 |
$582,500.00 |
|
4 |
Inventories |
300,000.00 |
320,000.00 |
|
5 |
Long-term assets: |
||
|
6 |
Plant and equipment |
2,200,000.00 |
2,150,000.00 |
|
7 |
Accumulated depreciation |
(1,200,000.00) |
(1,270,000.00) |
|
8 |
Land |
1,000,000.00 |
1,437,500.00 |
|
9 |
Current liabilities: |
||
|
10 |
Wages payable |
$700,000.00 |
$515,000.00 |
|
11 |
Long-term liabilities: |
||
|
12 |
Bonds payable |
0.00 |
385,000.00 |
|
13 |
Mortgage payable |
100,000.00 |
0.00 |
|
14 |
Common stock |
375,000.00 |
375,000.00 |
|
15 |
Paid-in capital in excess of par |
280,000.00 |
280,000.00 |
|
16 |
Retained earnings |
1,825,000.00 |
2,325,000.00 |
|
Blaylock Company |
|
Income Statement |
|
For the Year Ended December 31, 2016 |
|
1 |
Revenues |
$3,000,000.00 |
|
2 |
Gain on sale of equipment |
100,000.00 |
|
3 |
Less: Cost of goods sold |
(1,920,000.00) |
|
4 |
Less: Depreciation expense |
(270,000.00) |
|
5 |
Less: Interest expense |
(10,000.00) |
|
6 |
Net income |
$900,000.00 |
| Required: | |
| 1. | Prepare a statement of cash flows for Blaylock for 2016. |
In: Accounting
Concord Corporation enters into a 6-year lease of equipment on December 31, 2016, which requires 6 annual payments of $37,100 each, beginning December 31, 2016. In addition, Concord guarantees the lessor a residual value of $20,900 at the end of the lease. However, Concord believes it is probable that the expected residual value at the end of the lease term will be $10,900. The equipment has a useful life of 6 years.
Prepare Concords' December 31, 2016, journal entries assuming the implicit rate of the lease is 10% and this is known to Concord. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places e.g. 5,275.)
| Date | Account Titles and Explanation | Debit | Credit |
| December 31, 2016 | Right-of-Use Asset | ||
| Lease Liability | |||
| (To record the lease liability) | |||
| December 31, 2016 | Lease Liability | 37,100 | |
| Cash | 37,100 | ||
| (To record lease payment) |
I need help on finding both the credit and debit of Right-of-Use Asset and Lease Liability please. Please show work as well, Thank you! Be safe out there!
In: Accounting
On June 30, 2016, Blue, Inc., leased a machine from Big Leasing Corporation. The lease agreement qualifies as a capital lease and calls for Blue to make semiannual lease payments of $214,208 over a four-year lease term, payable each June 30 and December 31, with the first payment at June 30, 2016. Blue’s incremental borrowing rate is 12%, the same rate Big uses to calculate lease payment amounts. Depreciation is recorded on a straight-line basis at the end of each fiscal year. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
1. Determine the present value of the lease payments at June 30, 2016, (to the nearest $000) that Blue uses to record the leased asset and lease liability.
Present Value:
2. What would be the pretax amounts related to the lease that Blue would report in its balance sheet at December 31, 2016?
Leased asset:
Leased liability:
3. What would be the pretax amounts related to the lease that Blue would report in its income statement for the year ended December 31, 2016?
Pretax amount:
In: Accounting