Mark Bortz Electrical (“MBE”) gets a job to install the systems that will control the bank of eight elevators in a new 20-story hotel built in Richardson, TX. MBE obtains the components from the distributor, installs them without any problems, and moves onto the next job. However, prior to opening, the hotel’s owners find that none of the elevators are working.
An expert hired by the hotel determines the problem is that the wiring was improperly installed by MBE. Another contractor rewires the elevator bank and everything works fine.
Diagnosing and repairing the problem delayed the hotel’s opening by two weeks .The owners make a liability claim against MBE for the lost income incurred as a result of the delay in opening the hotel. Will MBE’s CGL insurer cover this claim?
(Answer based on the CGL policy)
In: Finance
Esperado Furnishings are retailers who purchase and
sell household furnishings, including table
lamps. The business uses a perpetual inventory system and adjusts
cost of goods sold for any
shortage or excess inventory. The business began the last quarter
of 2018 with merchandise
inventory of 10 pairs of “Italia” table lamps at a total cost of
$168,200.
The following transactions, relating to the “Italia” brand were
completed during the quarter:
October 5 Purchased 15 pairs of lamps at a cost of $17,020 per
pair.
October 14 Sold 18 pairs of lamps to Muller Furnishings at $22,250
per pair
October 22 Purchased 24 pairs at a cost of $18,175 per pair but the
supplier gave a 4% quantity
discount.
November 10 Sold 15 pairs of lamps to Orion Household Ltd and 10
pairs to Brown’s Furnishings
which yielded total sales revenue of $589,750.
November 12 Owing to an increased demand for this product, 30 pairs
of lamps were purchased
on account at a cost of $17,612 per pair. In addition, Esperado
paid $288 in
cash on each pair of lamps to have the inventory shipped from the
vendor’s
warehouse to Esperado’s showroom.
November 27 Sold 23 pairs of lamps to Middletown Company at a price
of $25,080 per pair.
November 30 An actual count of inventory was carried out which
revealed that there were 15
pairs of the “Italia” brand in the warehouse.
December 2 In preparation for the festive season, Esperado
purchased 25 pairs of lamps at a
total cost of $474,500.
December 15 5 pairs of the lamps purchased on December 2 were
returned to the supplier, as
they were not of the brand ordered.
December 30 Sold 22 pairs of lamps to two customers (Omega Traders
& Middleton
Furnishings) at a selling price of $26,550 per pair.
All purchases were on account and received on the dates
stated.
Required:
i) Prepare a perpetual inventory record for Esperado Furnishings,
using the first in, first
out (FIFO) method to determine the value of ending inventory at
December 31, 2018, and the
total amount to be assigned to cost of goods sold for the period.
ii) Given that selling, distribution and administrative costs for
the quarter were $23,445, $10,250
and$75,435 respectively, prepare an income statement for Esperado
Furnishings for the
period, to determine the net profit for the quarter, assuming the
perpetual inventory
system.
iii) You are told that 8 pairs of lamps sold on November 27, 2018
were on account. State the
journal entries necessary to record the transactions on November 12
and November 27,
assuming the business uses a: - Perpetual inventory system
- Periodic inventory system
iv) Assuming that Esperado sold 86 pairs of “Italia” brand of lamps
during the quarter; determine
the value of ending inventory and cost of goods sold assuming the
business used the periodic
system and the LIFO method?
In: Accounting
Esperado Furnishings are retailers who purchase and sell household furnishings, including table lamps. The business uses a perpetual inventory system and adjusts cost of goods sold for any shortage or excess inventory. The business began the last quarter of 2018 with merchandise inventory of 10 pairs of “Italia” table lamps at a total cost of $168,200.
The following transactions, relating to the “Italia” brand were completed during the quarter:
|
October 5 |
Purchased 15 pairs of lamps at a cost of $17,020 per pair |
|
October 14 |
Sold 18 pairs of lamps to Muller Furnishings at $22,250 per pair |
|
October 22 |
Purchased 24 pairs at a cost of $18,175 per pair but the supplier gave a 4% quantity discount. |
|
November 10 |
Sold 15 pairs of lamps to Orion Household Ltd and 10 pairs to Brown’s Furnishings which yielded total sales revenue of $589,750. |
|
November 12 |
Owing to an increased demand for this product, 30 pairs of lamps were purchased on account at a cost of $17,612 per pair. In addition, Esperado paid $288 in cash on each pair of lamps to have the inventory shipped from the vendor’s warehouse to Esperado’s showroom. |
|
November 27 |
Sold 23 pairs of lamps to Middletown Company at a price of $25,080 per pair. |
|
November 30 |
An actual count of inventory was carried out which revealed that there were 15 pairs of the “Italia” brand in the warehouse. |
|
December 2 |
In preparation for the festive season, Esperado purchased 25 pairs of lamps at a total cost of $474,500. |
|
December 15 |
5 pairs of the lamps purchased on December 2 were returned to the supplier, as they were not of the brand ordered. |
|
December 30 |
Sold 22 pairs of lamps to two customers (Omega Traders & Middleton Furnishings) at a selling price of $26,550 per pair. |
All purchases were on account and received on the dates stated. Required:
- Perpetual inventory system
- Periodic inventory system
In: Accounting
Esperado Furnishings are retailers who purchase and sell household furnishings, including table lamps. The business uses a perpetual inventory system and adjusts cost of goods sold for any shortage or excess inventory. The business began the last quarter of 2018 with merchandise inventory of 10 pairs of “Italia” table lamps at a total cost of $168,200.
The following transactions, relating to the “Italia” brand were completed during the quarter:
October 5 Purchased 15 pairs of lamps at a cost of $17,020 per pair.
October 14 Sold 18 pairs of lamps to Muller Furnishings at $22,250 per pair
October 22 Purchased 24 pairs at a cost of $18,175 per pair but the supplier gave a 4% quantity discount.
November 10 Sold 15 pairs of lamps to Orion Household Ltd and 10 pairs to Brown’s Furnishings which yielded total sales revenue of $589,750.
November 12 Owing to an increased demand for this product, 30 pairs of lamps were purchased on account at a cost of $17,612 per pair. In addition, Esperado paid $288 in cash on each pair of lamps to have the inventory shipped from the vendor’s warehouse to Esperado’s showroom.
November 27 Sold 23 pairs of lamps to Middletown Company at a price of $25,080 per pair.
November 30 An actual count of inventory was carried out which revealed that there were 15 pairs of the “Italia” brand in the warehouse.
December 2 In preparation for the festive season, Esperado purchased 25 pairs of lamps at a total cost of $474,500.
December 15 5 pairs of the lamps purchased on December 2 were returned to the supplier, as they were not of the brand ordered.
December 30 Sold 22 pairs of lamps to two customers (Omega Traders & Middleton Furnishings) at a selling price of $26,550 per pair. All purchases were on account and received on the dates stated. Required:
A) Prepare a perpetual inventory record for Esperado Furnishings, using the first in, first out (FIFO) method to determine the value of ending inventory at December 31, 2018, and the total amount to be assigned to cost of goods sold for the period.
B) Given that selling, distribution and administrative costs for the quarter were $23,445, $10,250 and$75,435 respectively, prepare an income statement for Esperado Furnishings for the period, to determine the net profit for the quarter, assuming the perpetual inventory system.
c) You are told that 8 pairs of lamps sold on November 27, 2018 were on account. State the journal entries necessary to record the transactions on November 12 and November 27, assuming the business uses a: - Perpetual inventory system - Periodic inventory system
D) Assuming that Esperado sold 86 pairs of “Italia” brand of lamps during the quarter; determine the value of ending inventory and cost of goods sold assuming the business used the periodic system and the LIFO method?
In: Accounting
Entries for Materials
Kingsford Furnishings Company manufactures designer furniture. Kingsford Furnishings uses a job order cost system. Balances on April 1 from the materials ledger are as follows:
| Fabric | $18,600 |
| Polyester filling | 5,600 |
| Lumber | 41,700 |
| Glue | 1,800 |
The materials purchased during April on account are summarized from the receiving reports as follows:
| Fabric | $94,100 |
| Polyester filling | 130,800 |
| Lumber | 257,800 |
| Glue | 8,900 |
Materials were requisitioned to individual jobs as follows:
| Fabric | Polyester Filling | Lumber | Glue | Total | ||||||
| Job 601 | $33,900 | $42,700 | $114,200 | $190,800 | ||||||
| Job 602 | 26,100 | 46,400 | 100,000 | 172,500 | ||||||
| Job 603 | 24,100 | 31,500 | 55,600 | 111,200 | ||||||
| Factory overhead-indirect materials | $4,400 | 4,400 | ||||||||
| Total | $84,100 | $120,600 | $269,800 | $4,400 | $478,900 | |||||
The glue is not a significant cost, so it is treated as indirect materials (factory overhead).
a. Journalize the entry to record the purchase of materials in April. If an amount box does not require an entry, leave it blank.
| a. | |||
b. Journalize the entry to record the requisition of materials in April. If an amount box does not require an entry, leave it blank.
| b. | |||
c. Determine the April 30 balances that would be shown in the materials ledger accounts.
| Fabric | Polyester Filling | Lumber | Glue | |
| Balance, April 30 | $ | $ | $ | $ |
In: Accounting
Entries for Materials
GenX Furnishings Company manufactures designer furniture. GenX Furnishings uses a job order cost system. Balances on June 1 from the materials ledger are as follows:
| Fabric | $18,400 |
| Polyester filling | 5,500 |
| Lumber | 41,200 |
| Glue | 1,800 |
The materials purchased during June are summarized from the receiving reports as follows:
| Fabric | $95,500 |
| Polyester filling | 132,700 |
| Lumber | 261,700 |
| Glue | 9,100 |
Materials were requisitioned to individual jobs as follows:
| Fabric | Polyester Filling | Lumber | Glue | Total | ||||||
| Job 601 | $36,300 | $45,700 | $122,300 | $204,300 | ||||||
| Job 602 | 28,000 | 49,700 | 107,100 | 184,800 | ||||||
| Job 603 | 25,800 | 33,800 | 59,500 | 119,100 | ||||||
| Factory overhead-indirect materials | $4,700 | 4,700 | ||||||||
| Total | $90,100 | $129,200 | $288,900 | $4,700 | $512,900 | |||||
The glue is not a significant cost, so it is treated as indirect materials (factory overhead).
a. Journalize the entry to record the purchase of materials in June.
| a. | fill in the blank db345b027fe1fa8_2 | ||
| fill in the blank db345b027fe1fa8_4 |
b. Journalize the entry to record the requisition of materials in June. If an amount box does not require an entry, leave it blank.
| b. | fill in the blank a2367e0e7fd1048_2 | fill in the blank a2367e0e7fd1048_3 | |
| fill in the blank a2367e0e7fd1048_5 | fill in the blank a2367e0e7fd1048_6 | ||
| fill in the blank a2367e0e7fd1048_8 | fill in the blank a2367e0e7fd1048_9 |
c. Determine the June 30 balances that would be shown in the materials ledger accounts.
| Fabric | Polyester Filling | Lumber | Glue | |
| Balance, June 30 | $fill in the blank 054b7903a026022_1 | $fill in the blank 054b7903a026022_2 | $fill in the blank 054b7903a026022_3 | $fill in the blank 054b7903a026022_4 |
In: Accounting
Entries for Materials
GenX Furnishings manufactures designer furniture. GenX Furnishings uses a job order cost system. Balances on June 1 from the materials ledger are as follows:
| Fabric | $31,700 |
| Polyester filling | 9,500 |
| Lumber | 71,000 |
| Glue | 3,000 |
The materials purchased during June are summarized from the receiving reports as follows:
| Fabric | $157,200 |
| Polyester filling | 218,500 |
| Lumber | 430,700 |
| Glue | 14,900 |
Materials were requisitioned to individual jobs as follows:
| Fabric | Polyester Filling | Lumber | Glue | Total | ||||||
| Job 601 | $59,700 | $75,200 | $201,200 | $336,100 | ||||||
| Job 602 | 46,000 | 81,800 | 176,100 | 303,900 | ||||||
| Job 603 | 42,400 | 55,500 | 97,900 | 195,800 | ||||||
| Factory overhead-indirect materials | $7,800 | 7,800 | ||||||||
| Total | $148,100 | $212,500 | $475,200 | $7,800 | $843,600 | |||||
The glue is not a significant cost, so it is treated as indirect materials (factory overhead).
a. Journalize the entry to record the purchase of materials in June.
| a. | Materials | ||
| Accounts Payable |
Feedback
a. Increase materials inventory and a liability for the total of purchases.
b. Journalize the entry to record the requisition of materials in June. If an amount box does not require an entry, leave it blank.
| b. | Work in Process | ||
| Factory Overhead | |||
| Materials |
Feedback
b. Increase the work in process for direct materials for the Jobs and factory overhead for the indirect materials.
c. Determine the June 30 balances that would be shown in the materials ledger accounts.
| Fabric | Polyester Filling | Lumber | Glue | |
| Balance, June 30 | $ | $ | $ | $ |
In: Accounting
Draw the cash flow: Your aunt Carry wants to purchase a 200K piece of equipment for her factory, operations cost will be 20K a year as well as a 80K fee at the end of year three. By year seven your aunt would be able to resell the piece of equipment for 15K
In: Finance
Esperado Furnishings are retailers who purchase and sell household furnishings, including table lamps. The business uses a perpetual inventory system and adjusts cost of goods sold for any shortage or excess inventory. The business began the last quarter of 2018 with merchandise inventory of 10 pairs of “Italia” table lamps at a total cost of $168,200.
The following transactions, relating to the “Italia” brand were completed during the quarter: October 5 Purchased 15 pairs of lamps at a cost of $17,020 per pair. October 14 Sold 18 pairs of lamps to Muller Furnishings at $22,250 per pair October 22 Purchased 24 pairs at a cost of $18,175 per pair but the supplier gave a 4% quantity discount. November 10 Sold 15 pairs of lamps to Orion Household Ltd and 10 pairs to Brown’s Furnishings which yielded total sales revenue of $589,750. November 12 Owing to an increased demand for this product, 30 pairs of lamps were purchased on account at a cost of $17,612 per pair. In addition, Esperado paid $288 in cash on each pair of lamps to have the inventory shipped from the vendor’s warehouse to Esperado’s showroom. November 27 Sold 23 pairs of lamps to Middletown Company at a price of $25,080 per pair. November 30 An actual count of inventory was carried out which revealed that there were 15 pairs of the “Italia” brand in the warehouse. December 2 In preparation for the festive season, Esperado purchased 25 pairs of lamps at a total cost of $474,500. December 15 5 pairs of the lamps purchased on December 2 were returned to the supplier, as they were not of the brand ordered. December 30 Sold 22 pairs of lamps to two customers (Omega Traders & Middleton Furnishings) at a selling price of $26,550 per pair. All purchases were on account and received on the dates stated. Required:
In: Accounting
21. According to the sticky-wage theory of the short-run aggregate supply curve, if workers and firms expected prices to rise by 3 percent, but instead prices rise by 1 percent, then a. employment and production rise. b. employment rises and production falls. c. employment falls and production rises. d. employment and production fall. 22. The aggregate demand and aggregate supply model implies monetary neutrality a. only in the short run. b. only in the long run. c. in both the short run and the long run. d. in neither the short run nor long run. 23. In the early 1930s in the United States, there was a a. large increase in output. In the early 1940s there was also a large increase in output. b. large increase in output. In the early 1940s there was a large decrease in output. c. large decrease in output. In the early 1940s there was a large increase in output. d. large decrease in output. In the early 1940s there was also a large decrease in output. 24. If households spend $90 of every $100 of after tax income, then the government purchases multiplier is a. 3 b. 5 c. 9 d. 10
In: Economics