Problem 23-04
Sarasota Company had the following information available at the end of 2020.
|
SARASOTACOMPANY |
||||||
|
2020 |
2019 |
|||||
| Cash |
$9,950 |
$4,010 |
||||
| Accounts receivable |
20,550 |
12,960 |
||||
| Short-term investments |
21,830 |
29,800 |
||||
| Inventory |
42,340 |
35,030 |
||||
| Prepaid rent |
2,990 |
12,090 |
||||
| Prepaid insurance |
2,090 |
91 |
||||
| Supplies |
990 |
75 |
||||
| Land |
124,970 |
174,030 |
||||
| Buildings |
353,000 |
353,000 |
||||
| Accumulated depreciation—buildings |
(104,980 |
) |
(86,810 |
) |
||
| Equipment |
522,130 |
396,610 |
||||
| Accumulated depreciation—equipment |
(128,890 |
) |
(111,580 |
) |
||
| Patents |
44,790 |
49,520 |
||||
| Total assets |
$911,760 |
$868,826 |
||||
| Accounts payable |
$21,970 |
$31,740 |
||||
| Income taxes payable |
5,030 |
3,980 |
||||
| Salaries and wages payable |
4,980 |
3,020 |
||||
| Short-term notes payable |
10,080 |
10,080 |
||||
| Long-term notes payable |
60,150 |
70,050 |
||||
| Bonds payable |
396,540 |
396,540 |
||||
| Premium on bonds payable |
23,170 |
27,926 |
||||
| Common stock |
241,390 |
218,640 |
||||
| Paid-in capital in excess of par—common stock |
25,100 |
17,500 |
||||
| Retained earnings |
123,350 |
89,350 |
||||
| Total liabilities and stockholders’ equity |
$911,760 |
$868,826 |
||||
|
SARASOTA COMPANY |
||||||
| Sales revenue |
$1,170,900 |
|||||
| Cost of goods sold |
752,630 |
|||||
|
418,270 |
||||||
| Gross margin | ||||||
| Operating expenses | ||||||
| Selling expenses |
$78,540 |
|||||
| Administrative expenses |
156,760 |
|||||
| Depreciation/Amortization expense |
40,210 |
|||||
| Total operating expenses |
275,510 |
|||||
| Income from operations |
142,760 |
|||||
| Other revenues/expenses | ||||||
| Gain on sale of land |
7,960 |
|||||
| Gain on sale of short-term investment |
4,000 |
|||||
| Dividend revenue |
2,380 |
|||||
| Interest expense |
(51,710 |
) |
(37,370 |
) |
||
| Income before taxes |
105,390 |
|||||
| Income tax expense |
39,370 |
|||||
| Net income |
66,020 |
|||||
| Dividends to common stockholders |
(32,020 |
) |
||||
| To retained earnings |
$34,000 |
|||||
Prepare a statement of cash flows for Sarasota Company using the
direct method accompanied by a reconciliation schedule. Assume the
short-term investments are debt securities, classified as
available-for-sale.
In: Accounting
Carla Corporation provides a defined contribution pension plan
for its employees. Under the plan, the company deducts 5% of each
employee’s gross pay for each bi-weekly pay period. The company
also contributes 6% of the employees’ gross pay to the pension
plan. The combined pension contributions are then submitted to the
pension trustee within 11 days of the end of the month in which the
pay was earned.
For the first pay period of October (from Sunday October 1 to
October 14, 2020), Carla’s total gross payroll was $174,000. Total
gross payroll for the period October 15 through Saturday, October
28, 2020, was $173,000. The total anticipated payroll for the
period October 29 through November 10, 2020, was $169,000
(employees worked Monday through Friday each week). On November 10,
2020, Carla submitted the pension contributions to the trustee for
the month of October (including accruals up to and including
October 31).
Prepare the October 14 journal entry to record the payroll,
including employee and employer contributions to the pension plan.
For simplicity, ignore income taxes and other statutory deductions.
(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.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
October 14 |
|||
|
(To record payment of salaries and wages expense) |
|||
|
(To record company portion of pension expense) |
Prepare the October 28 journal entry to record the payroll,
including employee and employer contributions to the pension plan.
For simplicity, ignore income taxes and other statutory deductions.
(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.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
October 28 |
|||
|
(To record payment of salaries and wages expense) |
|||
In: Accounting
Problem 23-04
Sarasota Company had the following information available at the end of 2020.
|
SARASOTACOMPANY |
||||||
|
2020 |
2019 |
|||||
| Cash |
$9,950 |
$4,010 |
||||
| Accounts receivable |
20,550 |
12,960 |
||||
| Short-term investments |
21,830 |
29,800 |
||||
| Inventory |
42,340 |
35,030 |
||||
| Prepaid rent |
2,990 |
12,090 |
||||
| Prepaid insurance |
2,090 |
91 |
||||
| Supplies |
990 |
75 |
||||
| Land |
124,970 |
174,030 |
||||
| Buildings |
353,000 |
353,000 |
||||
| Accumulated depreciation—buildings |
(104,980 |
) |
(86,810 |
) |
||
| Equipment |
522,130 |
396,610 |
||||
| Accumulated depreciation—equipment |
(128,890 |
) |
(111,580 |
) |
||
| Patents |
44,790 |
49,520 |
||||
| Total assets |
$911,760 |
$868,826 |
||||
| Accounts payable |
$21,970 |
$31,740 |
||||
| Income taxes payable |
5,030 |
3,980 |
||||
| Salaries and wages payable |
4,980 |
3,020 |
||||
| Short-term notes payable |
10,080 |
10,080 |
||||
| Long-term notes payable |
60,150 |
70,050 |
||||
| Bonds payable |
396,540 |
396,540 |
||||
| Premium on bonds payable |
23,170 |
27,926 |
||||
| Common stock |
241,390 |
218,640 |
||||
| Paid-in capital in excess of par—common stock |
25,100 |
17,500 |
||||
| Retained earnings |
123,350 |
89,350 |
||||
| Total liabilities and stockholders’ equity |
$911,760 |
$868,826 |
||||
|
SARASOTA COMPANY |
||||||
| Sales revenue |
$1,170,900 |
|||||
| Cost of goods sold |
752,630 |
|||||
|
418,270 |
||||||
| Gross margin | ||||||
| Operating expenses | ||||||
| Selling expenses |
$78,540 |
|||||
| Administrative expenses |
156,760 |
|||||
| Depreciation/Amortization expense |
40,210 |
|||||
| Total operating expenses |
275,510 |
|||||
| Income from operations |
142,760 |
|||||
| Other revenues/expenses | ||||||
| Gain on sale of land |
7,960 |
|||||
| Gain on sale of short-term investment |
4,000 |
|||||
| Dividend revenue |
2,380 |
|||||
| Interest expense |
(51,710 |
) |
(37,370 |
) |
||
| Income before taxes |
105,390 |
|||||
| Income tax expense |
39,370 |
|||||
| Net income |
66,020 |
|||||
| Dividends to common stockholders |
(32,020 |
) |
||||
| To retained earnings |
$34,000 |
|||||
Prepare a statement of cash flows for Sarasota Company using the
direct method accompanied by a reconciliation schedule. Assume the
short-term investments are debt securities, classified as
available-for-sale.
In: Accounting
Sandhill Company had the following information available at the
end of 2020.
|
SANDHILLCOMPANY |
||||||
|
2020 |
2019 |
|||||
| Cash |
$10,100 |
$4,020 |
||||
| Accounts receivable |
20,580 |
12,830 |
||||
| Short-term investments |
22,020 |
29,750 |
||||
| Inventory |
42,390 |
34,710 |
||||
| Prepaid rent |
3,020 |
12,030 |
||||
| Prepaid insurance |
2,100 |
89 |
||||
| Supplies |
1,000 |
74 |
||||
| Land |
125,640 |
176,140 |
||||
| Buildings |
347,130 |
347,130 |
||||
| Accumulated depreciation—buildings |
(104,250 |
) |
(87,940 |
) |
||
| Equipment |
530,080 |
398,810 |
||||
| Accumulated depreciation—equipment |
(130,600 |
) |
(111,650 |
) |
||
| Patents |
44,570 |
49,920 |
||||
| Total assets |
$913,780 |
$865,913 |
||||
| Accounts payable |
$22,110 |
$32,240 |
||||
| Income taxes payable |
5,010 |
4,010 |
||||
| Salaries and wages payable |
5,000 |
2,990 |
||||
| Short-term notes payable |
10,010 |
10,010 |
||||
| Long-term notes payable |
59,650 |
70,450 |
||||
| Bonds payable |
402,050 |
402,050 |
||||
| Premium on bonds payable |
19,870 |
21,533 |
||||
| Common stock |
241,660 |
220,690 |
||||
| Paid-in capital in excess of par—common stock |
24,940 |
17,540 |
||||
| Retained earnings |
123,480 |
84,400 |
||||
| Total liabilities and stockholders’ equity |
$913,780 |
$865,913 |
||||
|
SANDHILL COMPANY |
||||||
| Sales revenue |
$1,161,810 |
|||||
| Cost of goods sold |
753,770 |
|||||
|
408,040 |
||||||
| Gross margin | ||||||
| Operating expenses | ||||||
| Selling expenses |
$79,370 |
|||||
| Administrative expenses |
150,640 |
|||||
| Depreciation/Amortization expense |
40,610 |
|||||
| Total operating expenses |
270,620 |
|||||
| Income from operations |
137,420 |
|||||
| Other revenues/expenses | ||||||
| Gain on sale of land |
7,980 |
|||||
| Gain on sale of short-term investment |
4,040 |
|||||
| Dividend revenue |
2,410 |
|||||
| Interest expense |
(51,610 |
) |
(37,180 |
) |
||
| Income before taxes |
100,240 |
|||||
| Income tax expense |
39,060 |
|||||
| Net income |
61,180 |
|||||
| Dividends to common stockholders |
(22,100 |
) |
||||
| To retained earnings |
$39,080 |
|||||
Prepare a statement of cash flows for Sandhill Company using the
direct method accompanied by a reconciliation schedule. Assume the
short-term investments are debt securities, classified as
available-for-sale.
In: Accounting
Moonbeam Company manufactures toasters. For the first 8 months of 2020, the company reported the following operating results while operating at 75% of plant capacity: Sales (350,000 units) $4,379,000 Cost of goods sold: 2,605,000 Gross profit 1,774,000 Operating expenses 839,600 Net income $934,400 Cost of goods sold was 72% variable and 28% fixed; operating expenses were 82% variable and 18% fixed. In September, Moonbeam receives a special order for 19,100 toasters at $7.99 each from Luna Company of Ciudad Juarez. Acceptance of the order would result in an additional $2,900 of shipping costs but no increase in fixed costs. (a) Prepare an incremental analysis for the special order. (b) Should Moonbeam accept the special order?
In: Accounting
Moonbeam Company manufactures toasters. For the first 8 months of
2020, the company reported the following operating results while
operating at 75% of plant capacity:
| Sales (341,600 units) | $4,375,000 | ||
| Cost of goods sold | 2,610,800 | ||
| Gross profit | 1,764,200 | ||
| Operating expenses | 841,190 | ||
| Net income | $923,010 |
Cost of goods sold was 70% variable and 30% fixed; operating
expenses were 80% variable and 20% fixed.
In September, Moonbeam receives a special order for 23,100 toasters
at $7.85 each from Luna Company of Ciudad Juarez. Acceptance of the
order would result in an additional $3,100 of shipping costs but no
increase in fixed costs.
(a)
Prepare an incremental analysis for the special order.
(Round computations for per unit cost to 2 decimal
places, e.g. 15.25 and all other computations and final answers to
the nearest whole dollar, e.g. 5,725. Enter negative
amounts using either a negative sign preceding the number e.g. -45
or parentheses e.g. (45).)
In: Accounting
Here are comparative statement data for Duke Company and Lord Company, two competitors. All balance sheet data are as of December 31, 2020, and December 31, 2019.
Duke Company | Lord Company | |||||||
|---|---|---|---|---|---|---|---|---|
2020 | 2019 | 2020 | 2019 | |||||
| Net sales | $1,878,000 | $559,000 | ||||||
| Cost of goods sold | 1,100,508 | 296,829 | ||||||
| Operating expenses | 261,042 | 79,937 | ||||||
| Interest expense | 9,390 | 4,472 | ||||||
| Income tax expense | 54,462 | 6,149 | ||||||
| Current assets | 329,000 | $312,100 | 83,200 | $78,300 | ||||
| Plant assets (net) | 519,900 | 501,200 | 139,800 | 124,200 | ||||
| Current liabilities | 65,400 | 74,800 | 34,200 | 29,600 | ||||
| Long-term liabilities | 108,800 | 90,400 | 30,200 | 26,000 | ||||
| Common stock, $10 par | 499,500 | 499,500 | 120,500 | 120,500 | ||||
| Retained earnings | 175,200 | 148,600 | 38,100 | 26,400 | ||||
(a)
Prepare a vertical analysis of the 2020 income statement data for Duke Company and Lord Company. (Round percentages to 1 decimal place, e.g. 12.1%.)
Condensed Income Statement | |||||||
|---|---|---|---|---|---|---|---|
Duke Company | Lord Company | ||||||
Dollars | Percent | Dollars | Percent | ||||
select an income statement item Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsIncome Tax ExpenseInterest ExpenseNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesRevenuesTotal ExpensesTotal Revenues | $enter a dollar amount | enter a percentage number rounded to 1 decimal place % | $enter a dollar amount | enter a percentage number rounded to 1 decimal place % | |||
select an income statement item Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsIncome Tax ExpenseInterest ExpenseNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesRevenuesTotal ExpensesTotal Revenues | enter a dollar amount | enter a percentage number rounded to 1 decimal place % | enter a dollar amount | enter a percentage number rounded to 1 decimal place % | |||
select a summarizing line for the first part Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsIncome Tax ExpenseInterest ExpenseNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesRevenuesTotal ExpensesTotal Revenues | enter a total amount for the first part | enter total percentages rounded to 1 decimal place % | enter a total amount for the first part | enter total percentages rounded to 1 decimal place % | |||
select an income statement item Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsIncome Tax ExpenseInterest ExpenseNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesRevenuesTotal ExpensesTotal Revenues | enter a dollar amount | enter a percentage number rounded to 1 decimal place % | enter a dollar amount | enter a percentage number rounded to 1 decimal place % | |||
select a summarizing line for the second part Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsIncome Tax ExpenseInterest ExpenseNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesRevenuesTotal ExpensesTotal Revenues | enter a total amount for the second part | enter total percentages rounded to 1 decimal place % | enter a total amount for the second part | enter total percentages rounded to 1 decimal place % | |||
select an opening name for the third part Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsIncome Tax ExpenseInterest ExpenseNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesRevenuesTotal ExpensesTotal Revenues | |||||||
select an income statement item Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsIncome Tax ExpenseInterest ExpenseNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesRevenuesTotal ExpensesTotal Revenues | enter a dollar amount | enter a percentage number rounded to 1 decimal place % | enter a dollar amount | enter a percentage number rounded to 1 decimal place % | |||
select a summarizing line for the third part Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsIncome Tax ExpenseInterest ExpenseNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesRevenuesTotal ExpensesTotal Revenues | enter a total amount for all three parts | enter total percentages rounded to 1 decimal place % | enter a total amount for all three parts | enter total percentages rounded to 1 decimal place % | |||
select an income statement item Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsIncome Tax ExpenseInterest ExpenseNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesRevenuesTotal ExpensesTotal Revenues | enter a dollar amount | enter a percentage number rounded to 1 decimal place % | enter a dollar amount | enter a percentage number rounded to 1 decimal place % | |||
select a closing name for this statement Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsIncome Tax ExpenseInterest ExpenseNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesRevenuesTotal ExpensesTotal Revenues | $enter a total net income or loss amount | enter total percentages rounded to 1 decimal place % | $enter a total net income or loss amount | enter total percentages rounded to 1 decimal place % | |||
In: Accounting
On April 5, 2020 Company A sell merchandise to Company L for P50,000 under the terms: 2/10, n/30 FOB Shipping point freight prepaid. Company A being the shipper paid the freight amounting to P2,000. On April 12, Company L paid in full the account amounting to P50,960. Company A notify Company L that the amount to be paid is not P50,960 but P51,000. Whose claim do you think is correct A or L? Explain
ABC Enterprise is a grocery store that sells high volume but relatively low-priced items. The entity has a computerized system (point-of-sale scanner) to account efficiently all items sold. The accountant decided to use the periodic inventory system because the entity sells high volume and low-priced items, anyway at the end of the period a physical count of goods has to be made to establish the unsold items (merchandise inventory end). Do you agree with the accountant? If Yes why, if No support your answer.
In: Accounting
Congratulations! You have been hired as a consultant to advise Saint Leo University Hospital leadership on the development of a Disaster Preparedness and Response Plan. Saint Leo University Hospital is currently under construction and will celebrate its grand opening twelve months from the beginning of this course. Among the many projects to be completed before the hospital welcomes its first patients is writing the Disaster Preparedness and Response Plan. For this consultancy, select one of the following public health emergencies as the basis for formulating insights and recommendations to Saint Leo University Hospital leadership for its new Disaster Preparedness and Response Plan. ? Option 1: HurricaneThe module-by-module instructions for the term project are as follows:
Step 6A: Write approximately 750 focused, clear, concise, convincing, well-structured, and individually-authored words explaining how application of concepts in the Module 6 textbook chapters (e.g., strategic management, interorganizational collaboration, organizational values/mission/vision) informs the development, adoption, and eventual execution of Saint Leo University Hospital’s Disaster Preparedness and Response Plan for the selected public health emergency hurricane Apply and cite at least three references (e.g., disaster plans, scholarly articles) above and beyond the textbook
In: Nursing
Congratulations! You have been hired as a consultant to advise Saint Leo University Hospital leadership on the development of a Disaster Preparedness and Response Plan. Saint Leo University Hospital is currently under construction and will celebrate its grand opening twelve months from the beginning of this course. Among the many projects to be completed before the hospital welcomes its first patients is writing the Disaster Preparedness and Response Plan. For this consultancy, select one of the following public health emergencies as the basis for formulating insights and recommendations to Saint Leo University Hospital leadership for its new Disaster Preparedness and Response Plan. ? Option 1: Hurricane The module-by-module instructions for the term project are as follows:
Step 8A: Write approximately 750 focused, clear, concise, convincing, well-structured, and individually-authored words explaining how application of concepts in the Module 8 textbook chapters (e.g., personal responsibility, health information privacy, ethics, international collaboration) informs the development, adoption, and eventual execution of Saint Leo University Hospital’s Disaster Preparedness and Response Plan for the selected public health emergency hurricane Apply and cite at least three references (e.g., disaster plans, scholarly articles) above and beyond the textbook.
In: Nursing