COMPREHENSIVE PROBLEM (Completing the Accounting Cycle – Chapters 1-3)

Murfee Delivery Service is a delivery service company that delivers anything to anyone anywhere. The company intends to stand out due to its strict confidentiality policy forbidding any disclosure of its customers’ personal information, for a profit or otherwise. The company also adds, as part of its robust confidentiality policy, it will never poke fun or humiliate its customers for the ridiculous, and sometimes even embarrassing, items they choose to have delivered.   Murfee Delivery Service began operations on December 1, 2019.

The following transactions occurred during the month of December:

Dec 1    Sold $22,000 of common stock to Eddie Murfee, the founder of the company.

Dec 1    Purchased a $9,000 delivery van by signing a note, agreeing to repay principle and interest in 2 years. The van was purchased from Eddie’s cousin’s boyfriend, Christopher Farleigh. The van           was in great condition, especially considering that Christopher lived in the van down by the river            for a short period of time while he was looking for an apartment.

Dec 1    Paid $600 in advance for a six-month general liability insurance policy from Ned Ryerson            Insurance Group.

Dec 1    Hired 2 delivery drivers, Clark Griswold and Van Wilder. Surprisingly, both drivers passed their    drug tests and background checks, and they were able to begin working immediately.

Dec 4    Purchased $750 of office supplies from Dunder Mifflin Office Supply Store on account.

Dec 12 Delivered a “Get Well” Deluxe Wellness Kit to Ferris Bueller and received $2,200 cash.

Dec 15 Delivered 243 cases of wine for the annual Catalina Wine Mixer in California. Willis Ferrill was    billed $3,300 on account for services rendered.

Dec 18 Paid employee salaries to Clark and Van totaling $2,400.

Dec 20 Received $10,600 payment for services from Owen Wilzen for delivering wedding gifts to all the couples of weddings he has attended (uninvited) since 2005.

Dec 22 Collected $2,200 in advance from Billy Muree to have Punxsutawney Phil delivered from his       home in Calabasas, California, to Punxsutawney, Pennsylvania, in time for a special appearance on February 2^nd.

Dec 25 Collected $3,300 from Willis Ferrill for the December 15^th delivery.

Dec 27 Received a bill for $150 from Frankenstein Electric Company for December utilities, due on         January 10.

Dec 29 Paid office rent, $2,800, to the property manager, Jim Halpert, for December and January Rent.

Dec 30 Paid $150 to Frankenstein Electric Company for the bill received on December 27^th.

Dec 31 Paid cash dividends of $2,500 to stockholders.

Requirements:

1. Record all necessary journal entries for the December transactions. Note: Not all transactions in December require a journal entry. If no entry is required, you may choose to simply omit the transaction, or you may choose to record the date of the transaction and write “NO ENTRY” in the space where the accounts & amounts would normally be written.
2. Post the journal entries to the T-Accounts.
3. Prepare an Unadjusted Trial Balance as of December 31, 2019.
4. Record the adjusting entries as of December 31, 2019. Additional information necessary for adjusting entries is below:
   1. Accrued Salaries for the last two weeks in December, $2,400, will be paid in January.
   2. The prepaid insurance policy began on December 1.
   3. Office Supplies on hand are $450.
   4. The Note Payable on December 1 has an interest rate of 7%. Interest and principle are due in 2 years.
   5. Weekly deliveries made to Liyam Hemmensworth in the month of December totaling $8,000 have not been invoiced.
5. Post the adjusting entries to the T-Accounts. Note: You will be adding to the T-accounts you created in Step 2.
6. Prepare an Adjusted Trial Balance as of December 31, 2019.
7. Prepare the income statement and statement of stockholders’ equity for the month ended December 31, 2019. Prepare the classified balance sheet as of December 31, 2019.
8. Record the closing entries as of December 31, 2019.
9. Post the closing entries to the T-Accounts. Note: You will be adding to the T-accounts you created in Step 2 and updated in Step 5.
10. Prepare a Post-Closing Trial Balance as of December 31, 2019.

CHECK FIGURES:

Unadjusted Trial Balance Debit & Credit Totals $50,050

Adjusted Trial Balance Debit & Credit Totals $60,503

***(Note: Interest Exp. & Interest Pay. is rounded up)***

Net Income $17,297

Retained Earnings $14,797

Total Assets $51,200

Total Liabilities $14,403

Total Stockholders' Equity $36,797

Post-Closing Trial Balance Debit & Credit Totals $51,200

Work for the first variable, X:

2. Construct a frequency table, containing at least 5 classes, but no more than 8 classes. [2]

3. Make the following graphs, using Stat Crunch.

1. histogram [2]

2. frequency polygon [2]

3. cumulative frequency polygon [2]

4. stem and leaf [2]

5. box plot [2]

4. Obtain the descriptive statistics. [1]

A New York company is planning to decide about advertisements. He invites executives from a local newspaper, a local TV station, and a local radio station to make a presentation.

The newspaper executive claims to be able to provide an audience of 10,000 customers at a cost of $4,000 per ad. The breakdown of audience:

The executive from the local TV station claims to provide an audience of 25,000 customers at a cost of $15,000. The breakdown of audience:

The executive from the local radio station claims to provide an audience of 15,000 customers at a cost of $6,000. The breakdown of audience:

The company has the following policy:
            a. Use at least twice as many radio commercial as newspaper ads
            b. Reach at least 100,000 customers
            c. Reach at least twice as many young people as senior citizens
            d. Make sure that at least 30% of the audience is female.

Available space limits the number of newspaper ads to seven. The company wants to know the optimal number of each type of advertising to purchase to minimize the total cost.

a. Formulate a linear programming model first and then solve this using Excel.

b. Suppose another local radio station approaches and indicates that its commercial can reach 18,000 customers at a cost of $7,500 with a demographic breakdown:

If the company considered this station along with other media alternatives, how would this affect the solution?

Segment Analysis McHale Company does business in two customer segments, Retail and Wholesale. The following annual revenue information was determined from the accounting system's invoice information: 20Y5 20Y4 Retail $219,600 $244,000 Wholesale 179,400 156,000 Total revenue $399,000 $400,000 Prepare a horizontal analysis of the segments. Round percentages to one decimal place. Enter negative values as negative numbers. McHale Company Horizontal Analysis For the Years 20Y4 and 20Y5 20Y5 20Y4 Difference - Amount Difference - Percent Retail $219,600 $244,000 $ % Wholesale 179,400 156,000 % Total revenue $399,000 $400,000 $ % Prepare a vertical analysis of the segments. If required, round percentages to one decimal place. McHale Company Vertical Analysis For the Years 20Y4 and 20Y5 20Y5 Amount 20Y5 Percent 20Y4 Amount 20Y4 Percent Retail $219,600 % $244,000 % Wholesale 179,400 % 156,000 % Total revenue $399,000 % $400,000 % Submit AnswerTry Another Version

Data set

87 52 57 51 85 53 46 72 42 83

41 33 98 48 35 87 46 60 75 36

62 32 35 54 27 47 43 86 63 70

39 48 39 32 74 73 67 44 82 89

23 34 38 46 92 44 57 88 49 28

58 40 21 29 42 49 60 26 86 58.

For the given data set, create a frequency distribution with 7 classes. on separate page(s), provide answers for the following: n=, max, min, range, class width, upper and lower class limits, upper and lower class boundaries, class mid points, frequency distribution with histogram and frequency polygon, relative distribution with pareto chart, cummulative distribution with Ogive. submit a summary page(s) with your conclusions and graphs. submissions must be neat and professinal. points may be deducted for sloppy and unprofessional papers. please include your work at the end of the submission.

Mastery Problem: Target Income and Margin of Safety

Target Income and Margin of Safety

At the break-even point, sales and costs are exactly equal. However, the goal of most companies is to make a profit. When a company decides that it wants to earn more than the break-even point of income, it must define the amount it thinks it will realistically make. By modifying the break-even equation, the sales required to earn a target or desired amount of profit may be computed.

Complete the following:
If a company makes $5 off of each unit it sells and has a target operating income of $5,000, then it must sell  units. Similarly, if a company has a target operating income of $50,000 and knows that total expenses for the period will be $50,000, how much revenue must it earn to reach its target operating income? $

Units sold or revenue earned above and beyond the break-even point contributes to the margin of safety for a company. Margin of safety is a crude measure of risk, in that it serves as the padding between profit and the break-even point.

Complete the following:
Expressed in terms of units, if a company hits its break-even point in units (say, 300 units) and actually sells 500 units, then the margin of safety is  units. Similarly, if the break-even point in sales revenue is $80,000, and it actually has sales revenue of $250,000, then its margin of safety is $.

APPLY THE CONCEPTS: Target income (number of units sold)

Suppose a business has pricing and cost information as follows::

For the upcoming period, the company wishes to generate operating income of $900. Given the cost and pricing structure for the company’s product, how many units must the company sell to attain its target income?

Remember that the basic equation for calculating operating income is as follows:

Step 1: Replace the operating income in the equation with your company’s target income, and insert your cost and pricing information into the equation, as well:

Step 2: Rearrange the equation to isolate units to one side of the equation:

Number of Units to Earn Target Income =  units

Step 3: Create a contribution margin income statement to check your previous work. Enter all amounts as positive numbers.

APPLY THE CONCEPTS: Target income (sales revenue)

Another useful method for figuring out the type of performance your company will need to reach a target income is by using sales revenue. Rather than using the number of units, this method uses total sales revenue. In companies for which the total set of goods produced and sold is more varied, this would be the preferred method, as opposed to a business in which only one product is sold. Assume a company has pricing and cost information as follows:

For the upcoming period, the company wishes to generate operating income of $75,000. Given the cost and pricing structure for the company’s product, how much sales revenue must it generate to attain its target income?

Step 1: Calculate the contribution margin ratio:

The contribution margin ratio is the contribution margin in proportion to the selling price on a per-unit basis.

Note: The contribution margin ratio is calculated to one decimal place.)

Step 2: Calculate the sales revenue required to attain the target income:

Step 3: Create a contribution margin income statement, to check your previous work. Enter all amounts as positive numbers.

APPLY THE CONCEPTS: Margin of Safety
Margin of safety can allow you to see how much padding there is for your company between profit and loss. If this number is great, it may indicate that your company is performing very well. If this number is small, it may be worth looking into possible remediation. Consider the following pricing and cost information:

For the upcoming period, the company projects that it will sell 1,000 units. Considering that the company has a unit break-even point of 600 units, what is the margin of safety in terms of both units and sales revenue? Round your answers to two decimal places, if necessary.

A sporting goods company operates retail stores in the San Francisco and San Jose areas. Customers were asked to rate their shopping experiences. Their results indicated that 15% rated their shopping experience as Poor, 45% as Average, and 40% as Good. In addition, 67% of the customers who rated their experience as Poor came from San Jose, 36% of the customers who rated their experience as Average came from San Jose, and 30% of the customers who rated their experience as Good came from San Jose.

(a) What is the probability that a customer came from San Jose?

(b) What is the probability that a customer who shopped in San Jose rated his or her experience as Good?

Help with any of these parts would be appreciated it doesn't need to be all of it

Part 2– General Journal (LO3-2) – Record the following transactions in the General Journal

Customers are charged $91per hour for services rendered

Customers are charged $65 for each unitpurchased

Inventory can be purchased for $30 per unit

Part 3 – General Ledger (LO3-2) – Post the information from the journal entries into the general ledger and calculate balances.   

Part 4 – Trial Balance (LO3-2) – Complete a trial balance from the information in the General Ledger.

Part 5 – Adjusting journal Entries – (LO3-3) – Record the following adjusting entries in the General Journal.

Part 6 – General Ledger - Post the adjusting entries to the General Ledger.   

Part 7 – Adjusted Trial Balance (LO3-3) – Complete an Adjusted Trial Balance using the information from the General Leger.  Debits should equal credits if you have done the prior steps correctly.

Part 8– Prepare the end of month Income Statement (LO3-4).

Part 9 – Prepare the end of month Retained Earnings Statement (LO3-4).

Part 10– Prepare the end of month Balance Sheet (LO3-4).

Part 11– Closing Entries – Record closing entries in the General Journal and post them to the General Ledger

Part 12– Prepare a Post-Closing Trial Balance.

Help with any of these parts would be appreciated it doesn't need to be all of it

Part 2– General Journal (LO3-2) – Record the following transactions in the General Journal

Customers are charged $91per hour for services rendered

Customers are charged $65 for each unitpurchased

Inventory can be purchased for $30 per unit

Part 3 – General Ledger (LO3-2) – Post the information from the journal entries into the general ledger and calculate balances.   

Part 4 – Trial Balance (LO3-2) – Complete a trial balance from the information in the General Ledger.

Part 5 – Adjusting journal Entries – (LO3-3) – Record the following adjusting entries in the General Journal.

Part 6 – General Ledger - Post the adjusting entries to the General Ledger.   

Part 7 – Adjusted Trial Balance (LO3-3) – Complete an Adjusted Trial Balance using the information from the General Leger.  Debits should equal credits if you have done the prior steps correctly.

Part 8– Prepare the end of month Income Statement (LO3-4).

Part 9 – Prepare the end of month Retained Earnings Statement (LO3-4).

Part 10– Prepare the end of month Balance Sheet (LO3-4).

Part 11– Closing Entries – Record closing entries in the General Journal and post them to the General Ledger

Part 12– Prepare a Post-Closing Trial Balance.