4. Capstone, Inc. (Chapter 9)
Capstone, Inc. is preparing its budget for the coming year, 2020. The first step is to plan for the first quarter of that coming year. Capstone, Inc. gathered the following information from the managers.
Sales
Unit sales for November 2019 113,000
Unit sales for December 2019 103,000
Expected unit sales for January 2020 115,000
Expected unit sales for February 2020 114,500
Expected unit sales for March 2020 118,000
Expected unit sales for April 2020 130,000
Expected unit sales for May 2020 140,000
Unit selling price $12.50
Capstone, Inc. likes to keep 10% of the next month’s unit sales in ending inventory. All sales are on account. 85% of the Accounts Receivable are collected in the month of sale, and 15% of the Accounts Receivable are collected in the month after sale. Accounts receivable on December 31, 2019, totaled $175,000.
Direct Materials
Item Amount Used per Unit Inventory, Dec. 31
Metal 1 lb @ 58¢ per lb. 5,177.5 lbs
Plastic 12 oz @ 6¢ per oz 3,883.125 lbs
Rubber 12 oz @ 5¢ per oz 1,294.375 lbs
2.5 lbs per unit total 10,355.0 lbs
Metal, plastic, and rubber together are 75¢ per pound per unit. (Hint: Do not prepare a separate materials purchases budget for each item of direct materials. Prepare a combined budget using the lbs per unit total applied to the budgeted production).
Capstone, Inc. likes to keep 5% of the materials needed for the next month in its ending inventory. Payment for materials is made within 15 days. 50% is paid in the month of purchase, and 50% is paid in the month after purchase. Accounts Payable on December 31, 2019, totaled $135,000. Raw Materials on December 31, 2019, totaled 10,355 pounds.
Direct Labor
Labor requires 15 minutes per unit for completion and is paid at a rate of $8 per hour.
Manufacturing Overhead
Indirect materials 35¢ per labor hour
Indirect labor 55¢ per labor hour
Utilities 40¢ per labor hour
Maintenance 20¢ per labor hour
Salaries $42,000 per month
Depreciation $16,800 per month
Property taxes $ 2,675 per month
Insurance $ 1,200 per month
Janitorial $ 1,300 per month
Selling and Administrative
Variable selling and administrative cost per unit is $1.60.
Advertising $15,500 a month
Insurance $ 1,250 a month
Salaries $75,000 a month
Depreciation $ 3,000 a month
Other fixed costs $ 3,500 a month
Other Information
The Cash balance on December 31, 2019, totaled $115,000, but management has decided it would like to maintain a cash balance of at least $800,000 beginning on January 31, 2020. Dividends are paid each month at the rate of $1.75 per share for 6,000 shares outstanding. The company has an open line of credit with Romney’s Bank. The terms of the agreement requires the borrowing to be in $1,000 increments at 8% interest. Capstone, Inc. borrows on the first day of the month and repays on the last day of the month. A $525,000 equipment purchase is planned for February.
Instructions
For the first quarter of 2020, do the following.
In: Accounting
4. Capstone, Inc. (Chapter 9)
Capstone, Inc. is preparing its budget for the coming year, 2020. The first step is to plan for the first quarter of that coming year. Capstone, Inc. gathered the following information from the managers.
Sales
Unit sales for November 2019 113,000
Unit sales for December 2019 103,000
Expected unit sales for January 2020 115,000
Expected unit sales for February 2020 114,500
Expected unit sales for March 2020 118,000
Expected unit sales for April 2020 130,000
Expected unit sales for May 2020 140,000
Unit selling price $12.50
Capstone, Inc. likes to keep 10% of the next month’s unit sales in ending inventory. All sales are on account. 85% of the Accounts Receivable are collected in the month of sale, and 15% of the Accounts Receivable are collected in the month after sale. Accounts receivable on December 31, 2019, totaled $175,000.
Direct Materials
Item Amount Used per Unit Inventory, Dec. 31
Metal 1 lb @ 58¢ per lb. 5,177.5 lbs
Plastic 12 oz @ 6¢ per oz 3,883.125 lbs
Rubber 12 oz @ 5¢ per oz 1,294.375 lbs
2.5 lbs per unit total 10,355.0 lbs
Metal, plastic, and rubber together are 75¢ per pound per unit. (Hint: Do not prepare a separate materials purchases budget for each item of direct materials. Prepare a combined budget using the lbs per unit total applied to the budgeted production).
Capstone, Inc. likes to keep 5% of the materials needed for the next month in its ending inventory. Payment for materials is made within 15 days. 50% is paid in the month of purchase, and 50% is paid in the month after purchase. Accounts Payable on December 31, 2019, totaled $135,000. Raw Materials on December 31, 2019, totaled 10,355 pounds.
Direct Labor
Labor requires 15 minutes per unit for completion and is paid at a rate of $8 per hour.
Manufacturing Overhead
Indirect materials 35¢ per labor hour
Indirect labor 55¢ per labor hour
Utilities 40¢ per labor hour
Maintenance 20¢ per labor hour
Salaries $42,000 per month
Depreciation $16,800 per month
Property taxes $ 2,675 per month
Insurance $ 1,200 per month
Janitorial $ 1,300 per month
Selling and Administrative
Variable selling and administrative cost per unit is $1.60.
Advertising $15,500 a month
Insurance $ 1,250 a month
Salaries $75,000 a month
Depreciation $ 3,000 a month
Other fixed costs $ 3,500 a month
Other Information
The Cash balance on December 31, 2019, totaled $115,000, but management has decided it would like to maintain a cash balance of at least $800,000 beginning on January 31, 2020. Dividends are paid each month at the rate of $1.75 per share for 6,000 shares outstanding. The company has an open line of credit with Romney’s Bank. The terms of the agreement requires the borrowing to be in $1,000 increments at 8% interest. Capstone, Inc. borrows on the first day of the month and repays on the last day of the month. A $525,000 equipment purchase is planned for February.
Instructions
For the first quarter of 2020, do the following.
In: Accounting
Western Vancouver Company has just completed their trial balance for the year of operations ending March 31, 2020 as shown below:
$
Office supplies 140
Interest earned 3,370
Office supplies expense 10,220
Patent 600
Commission expense 1,320
Prepaid advertising expense 480
Rent income 10,840
Furniture 9,200
Interest expense 4,500
Accrued interest expense 374
Cash 3,400
Copyright 6,000
Notes receivable, 2025 28,600
Unearned rent income 800
Investment, due 3 months 2,400
Accrued salary expense 526
Translation services revenue 36,000
Land 22,000
Depreciation expense, building 5,000
Accrued commission income 10,200
Accumulated depreciation, furniture 700
Advertising expense 5,520
John Wright, capital 149,200
Depreciation expense, furniture 390
Long-term notes payable, (2030) 75,000
Utilities expense 7,344
John Wright, withdrawals 1,100
Accounts payable 1,684
Building 125,000
Salaries expense 312,520
Accumulated depreciation, building 5,000
Rent paid 24,600
Additional information: 1. Additional investment made by the owner during the year, $22,000.
2. $8,000 of the Long Term Notes Payable will be paid in 5 months after March 31, 2020.
3. $3,600 of the Notes Receivable will be received by March 31, 2021.
Required: Prepare, in good form, a Balance Sheet for the year 2020.
In: Accounting
Bendigo Pottery Ltd is a wholesale distributor of hand-made glazed garden pots to retail stores. All garden pots are identical. Details for January 2020 are shown below.
|
January |
1 |
Opening inventory |
2,000 pots – cost $39 each |
|
8 |
Sales |
1,200 pots – selling price $80 each |
|
|
9 |
Purchases |
1,600 pots – purchase price $44 each |
|
|
28 |
Sales |
1,800 pots – selling price $84 each |
|
|
31 |
Closing inventory |
600 pots from the stock stake |
Additional information:
Required:
In: Accounting
Bendigo Pottery Ltd is a wholesale distributor of hand-made glazed garden pots to retail stores. All garden pots are identical. Details for January 2020 are shown below.
|
January |
1 |
Opening inventory |
2,000 pots – cost $39 each |
|
8 |
Sales |
1,200 pots – selling price $80 each |
|
|
9 |
Purchases |
1,600 pots – purchase price $44 each |
|
|
28 |
Sales |
1,800 pots – selling price $84 each |
|
|
31 |
Closing inventory |
600 pots from the stock stake |
Additional information:
Required:
In: Accounting
Western Vancouver Company has just completed their trial balance for the year of operations ending March 31, 2020 as shown below:
$
Office supplies 140
Interest earned 3,370
Office supplies expense 10,220
Patent 600
Commission expense 1,320
Prepaid advertising expense 480
Rent income 10,840
Furniture 9,200
Interest expense 4,500
Accrued interest expense 374
Cash 3,400
Copyright 6,000
Notes receivable, 2025 28,600
Unearned rent income 800
Investment, due 3 months 2,400
Accrued salary expense 526
Translation services revenue 36,000
Land 22,000
Depreciation expense, building 5,000
Accrued commission income 10,200
Accumulated depreciation, furniture 700
Advertising expense 5,520
John Wright, capital 149,200
Depreciation expense, furniture 390
Long-term notes payable, (2030) 75,000
Utilities expense 7,344
John Wright, withdrawals 1,100
Accounts payable 1,684
Building 125,000
Salaries expense 312,520
Accumulated depreciation, building 5,000
Rent paid 24,600
Additional information: 1. Additional investment made by the owner during the year, $22,000.
2. $8,000 of the Long Term Notes Payable will be paid in 5 months after March 31, 2020.
3. $3,600 of the Notes Receivable will be received by March 31, 2021.
Required: Prepare, in good form, a Balance Sheet for the year 2020.
In: Accounting
Sunland Inc. has 1.10 million common shares outstanding as at January 1, 2020. On June 30, 2020, 4% convertible bonds were converted into 95,000 additional shares. Up to that point, the bonds had paid interest of $225,000 after tax. Net income for the year was $1,298,572. During the year, the company issued the following:
| 1. | June 30: | 13,260 call options giving holders the right to purchase shares of the company for $34 | ||
| 2. | Sept. 30: | 18,260 put options allowing holders to sell shares of the company for $29 |
On February 1, Sunland also purchased in the open market 13,260
call options on its own shares, allowing it to purchase its own
shares for $31. Assume the average market price for the shares
during the year was $39.
Calculate the required EPS numbers under IFRS. For simplicity, ignore the impact that would result from the convertible debt being a hybrid security. (Round answers to 2 decimal places, e.g. 15.25.)
| Basic EPS | $ | |
| Diluted EPS | $ |
eTextbook and Media
Show the required presentations on the face of the income statement. (Round answers to 2 decimal places, e.g. 15.25.)
| Sunland
Inc. Partial Income Statement December 31, 2020For the Year Ended December 31, 2020For the Month Ended December 31, 2020 |
||
| Earnings Per Common Share: | ||
| Basic Earnings Per Share | $ | |
| Diluted Earnings Per Share | $ | |
In: Accounting
The comparative balance sheets of NCAA Corporation are the following:
|
December 31 |
||
|
2020 |
2019 |
|
|
Cash |
$750,750 |
$487,500 |
|
Accounts receivable |
526,500 |
390,000 |
|
Inventory |
221,000 |
260,000 |
|
Investments |
0 |
130,000 |
|
Building |
0 |
975,000 |
|
Equipment |
2,730,000 |
780,000 |
|
Patent |
182,000 |
227,500 |
|
Totals |
$4,410,250 |
$3,250,000 |
|
Allowance for doubtful accounts |
$121,875 |
$162,500 |
|
Accumulated depreciation on equipment |
104,000 |
260,000 |
|
Accumulated depreciation on building |
0 |
227,500 |
|
Accounts payable |
195,000 |
130,000 |
|
Dividends payable |
0 |
227,500 |
|
Notes payable, short-term (nontrade) |
243,750 |
325,000 |
|
Long-term notes payable |
1,716,000 |
780,000 |
|
Common stock |
1,225,250 |
845,000 |
|
Retained earnings |
804,375 |
292,500 |
|
Totals |
$4,410,250 |
$3,250,000 |
Additional data related to 2020 are as follows:
1. Equipment that had cost $351,000 and was 80% depreciated at time of disposal was sold for $140,400.
2. $380,250 of the long-term note payable was paid by issuing common stock.
3. Cash dividends paid were $227,500.
4. On January 1, 2020, the building was completely destroyed by a flood. Insurance proceeds on the
building was $750,750 (after netting $15,015 taxes).
5. Investments (available-for-sale) were sold at $71,500 below their cost. The company has made similar sales and investments in the past.
6. A long-term note for $1,316,250 was issued for the acquisition of equipment.
Instructions: Prepare a statement of cash flows using the indirect method.
In: Accounting
Instruction: Use Microsoft Visio to draw a use case diagram and a sequence diagram for the following business requirements.
Online Recruiting System (website)
1) The Online Interview System: The search committee usually selects 3 to 5 candidates for a Skype interview. When the search committee starts a Skype interview, they connect their web browsers to an interview module developed by the company’s IT team (we call this type of software as home-developed software). The interview module then connects to Skype. At the same time, the candidate (interviewee) also connects their web browser to Skype. Now the search committee and the candidate can see and talk with each other using their web browsers. Please note the data flow from the committee to the candidate must go through the interview module and Skype.
The interview lasts 40 minutes. During the interview, the interview module is recording a video. After the interview session is closed, the interview module saves the video into the HR database and then calls the AI module to translate the video a Microsoft Word document. After the video is fully translated to a Word document, the interview module saves the Word file into the HR database.
In: Computer Science
Dye Trucking raised $95 million in new debt and used this to buy back stock. After the recap, Dye's stock price is $9.50. If Dye had 70 million shares of stock before the recap, how many shares does it have after the recap? Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answer to the nearest whole number.
? million shares
In: Finance