As a preliminary to requesting budget estimates of sales, costs, and expenses for the fiscal year beginning January 1, 20Y9, the following tentative trial balance as of December 31, 20Y8, is prepared by the Accounting Department of Regina Soap Co.:
| Cash | $85,000 | ||
| Accounts Receivable | 125,600 | ||
| Finished Goods | 69,300 | ||
| Work in Process | 32,500 | ||
| Materials | 48,900 | ||
| Prepaid Expenses | 2,600 | ||
| Plant and Equipment | 325,000 | ||
| Accumulated Depreciation—Plant and Equipment | $156,200 | ||
| Accounts Payable | 62,000 | ||
| Common Stock, $10 par | 180,000 | ||
| Retained Earnings | 290,700 | ||
| $688,900 | $688,900 |
Factory output and sales for 20Y9 are expected to total 200,000 units of product, which are to be sold at $5.00 per unit. The quantities and costs of the inventories at December 31, 20Y9, are expected to remain unchanged from the balances at the beginning of the year.
Budget estimates of manufacturing costs and operating expenses for the year are summarized as follows:
| Estimated Costs and Expenses | ||||
| Fixed (Total for Year) |
Variable (Per Unit Sold) |
|||
| Cost of goods manufactured and sold: | ||||
| Direct materials | _ | $1.10 | ||
| Direct labor | _ | 0.65 | ||
| Factory overhead: | ||||
| Depreciation of plant and equipment | $40,000 | _ | ||
| Other factory overhead | 12,000 | 0.40 | ||
| Selling expenses: | ||||
| Sales salaries and commissions | 46,000 | 0.45 | ||
| Advertising | 64,000 | _ | ||
| Miscellaneous selling expense | 6,000 | 0.25 | ||
| Administrative expenses: | ||||
| Office and officers salaries | 72,400 | 0.12 | ||
| Supplies | 5,000 | 0.10 | ||
| Miscellaneous administrative expense | 4,000 | 0.05 | ||
Balances of accounts receivable, prepaid expenses, and accounts payable at the end of the year are not expected to differ significantly from the beginning balances. Federal income tax of $30,000 on 20Y9 taxable income will be paid during 20Y9. Regular quarterly cash dividends of $0.15 per share are expected to be declared and paid in March, June, September, and December on 18,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $75,000 cash in May.
Required:
1. Prepare a budgeted income statement for 20Y9.
| Regina Soap Co. | |||
| Budgeted Income Statement | |||
| For the Year Ending December 31, 20Y9 | |||
| $ | |||
| Cost of goods sold: | |||
| $ | |||
| Cost of goods sold | |||
| Gross profit | $ | ||
| Operating expenses: | |||
| Selling expenses: | |||
| $ | |||
| Total selling expenses | $ | ||
| Administrative expenses: | |||
| $ | |||
| Total administrative expenses | |||
| Total operating expenses | |||
| Income before income tax | $ | ||
| $ | |||
2. Prepare a budgeted balance sheet as of December 31, 20Y9.
| Regina Soap Co. Budgeted Balance Sheet December 31, 20Y9 |
|||
|---|---|---|---|
| Assets | |||
| Current assets: | |||
| $ | |||
| Inventories: | |||
| $ | |||
| Total current assets | $ | ||
| Property, plant, and equipment: | |||
| $ | |||
| Total property, plant, and equipment | |||
| Total assets | $ | ||
| Liabilities | |||
| Current liabilities: | |||
| $ | |||
| Stockholders' Equity | |||
| $ | |||
| Total stockholders’ equity | |||
| Total liabilities and stockholders’ equity | $ | ||
In: Accounting
If a business manager deposits $60,000 in a bond fund at the end of each year for twenty years, what will be the value of her investment:
a. At a compounded rate of 6 percent?
b. At a compounded rate of 4 percent? What would the outcome be in each case if the deposits were made at the beginning of each year?
In: Accounting
Consider an economy with a corn producer, some
consumers, and a government. In a given year, the corn producer
grows 30 million bushels of corn and the market price for corn is
$5 per bushel. Of the 30 million bushels produced, 20 million are
sold to consumers, 5 million are stored in inventory, and 5 million
are sold to the government to feed the army. The corn producer pays
$60 million in wages to consumers and $20 million in taxes to the
government. Consumers pay $10 million in taxes to the government,
receive $10 million in interest on the government debt, and receive
$5 million in Social Security payments from the government. The
profits of the corn producer are distributed to consumers.
(a) Calculate GDP using (i) the product approach, (ii) the
expenditure approach, and (iii) the income approach.
On the Chegg solutions the Income approach is
calculated like this: GDP=(60+70+20) million = 150.
My question is why isn't tax paid by consumers added here and why
isn't 10 million $ of interest counted in income? Please help.
In: Economics
The following information is for Polo Limited for 2017:
Net income for the year ……………………………………………… $2,300,000
8% convertible bonds issued at par ($1,000 per bond), with each
bond convertible into 30 common shares ……………………………………………………….
2,000,000
6% convertible, cumulative preferred shares, $100 par value, with
each share convertible into 3 common shares …………………………………………………
4,000,000
Common shares (600,000 shares outstanding)
………………………............................................................................................................................................6,000,000
Stock options (granted in a prior year) to purchase 75,000 common
shares at $20 per share ………………………………………………………………………… 750,000
Tax rate for 2017 …………………………………………………………. 30%
Average market price of common shares ……………………….. $25 per share
There were no changes during 2017 in the number of common shares, preferred shares, or convertible bonds outstanding. For simplicity, ignore the requirement to book the convertible bonds’ equity portion separately.
Instructions
(a) Calculate basic earnings per share for 2017.
(b) Calculate diluted earnings per share for 2017.
(c) Discuss how a potential shareholder’s investment decision may
be affected if diluted earnings per share was not reported
In: Accounting
In the audit of a client with a fiscal year ending December 31, the CPAs obtain a January 10 bank statement directly from the bank. Explain how this cutoff bank statement will be used
a. In the review of the December 31 bank reconciliation.
b. To obtain other audit information.
In: Accounting
| Consider the following. |
| a. |
What is the duration of a two-year bond that pays an annual coupon of 9 percent and whose current yield to maturity is 14 percent? Use $1,000 as the face value. (Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161)) |
| Duration of a bond |
| b. |
What is the expected change in the price of the bond if interest rates are expected to decline by 0.2 percent? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) |
| Expected change in the price |
$ |
In: Finance
If inventory is overstated at the end of Year 1, what effect does it have on Year 2’s account balances, assuming there is no inventory error in Year 2?
a. Overstating inventory
b. Understating cost of goods sold
c. Overstating net income
d. Overstating beginning retained earnings
If you could explain why the right answer is correct and why the other answers are incorrect, I would really appreciate it. Thank you!
In: Accounting
The focus for this live classroom is a discussion about diet therapy for a 58 year old woman who experienced her first MI and is being discharged home. She currently works full time and is divorced. She lives in an apartment and has no family in the surrounding community.
To prepare for the live classroom session and your written submission, use your chapter readings, review of videos, course materials, research, and written assignments.
Be prepared to discuss the following:
What should be the focus for her nutritional history and assessment?
What dietary recommendations should be made?
What obstacles to staying on the diet recommended might this woman encounter?
What special considerations should you, as a nurse, be aware of?
In: Nursing
Suppose that the GDP of the country of Zambia is growing at 1%
each year. Also suppose that Zambia has a constant
velocity of money and it decides to print money at a much faster
rate increasing its money supply by 20%. Using the
quantity theory of money, what happens to the price level in Zambia
as a result of the printing of money? In other words, will
they have inflation? If so, how much? Explain.
In: Economics
Winston Company estimates that the factory overhead for the following year will be $1,316,700. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 39,900 hours. The total machine hours for the year were 54,400 hours. The actual factory overhead for the year was $1,820,000. Enter the amount as a positive number.
a. Determine the total factory overhead amount
applied.
$
b. Calculate the over- or underapplied amount
for the year.
$
c. Prepare the journal entry to close factory overhead into Cost of Goods Sold.
In: Accounting