Sanford Company

The Sanford Company had the following balance sheet as of December 31, 20x2. The transactions for the first three months of 20x3 are also presented along with other information about specific accounts.

Sanford Company
Balance Sheet
December 31, 20x2

ASSETS           LIABILITIES  
Cash   $ 57,000       Accounts Payable   $ 34,000
Marketable Securities   8,000       Wages Payable   11,500
Accounts Receivable   73,000       Taxes Payable   8,000
Uncollectible Accounts   -2,000       Short-Term Notes Payable   12,000
Inventory   84,000       Interest Payable   500
Supplies   9,000       Unearned Revenue   13,000
Prepaid Insurance   6,000          
Total Current Assets   $235,000       Total Current Liabilities   $ 79,000
              
Land   $114,000       Long-Term Notes Payable   $ 20,000
Equipment   227,000       Bonds Payable   100,000
Accumulated Depreciation   -87,000       Mortgage Payable   320,000
Building   560,000       Total Long-Term Liabilities   $440,000
Accumulated Depreciation   -130,000          
Intangible Assets   70,000       STOCKHOLDER EQUITY  
Total Long-Term Assets   $754,000       Capital Stock   $100,000
           Paid in Capital   250,000
           Retained Earnings   120,000
           Total Stockholders Equity   $470,000
Total Assets   $989,000       Total Liabilities & Equity   $989,000

Additional Information

Accounts Receivable
The following table indicates the historical breakout of accounts receivable

Days   Current   30 to 60   60 to 90   Over 90
Percent of Balance   50%   30%   15%   5%
Percent Collectible   95%   90%   80%   60%

The company uses the gross method of recording all sales on accounts.

Marketable Securities
The interest rate earned on marketable securities is 6.0%.

Inventory
In 20x2, the company had used the gross method to record inventory purchases on account. As of January 1, 20x3, the company is using the net method to record inventory purchases on account.

Prepaid Insurance
A three-year insurance policy in the amount of $7,200 was purchased on July 1, 20x2.

Equipment
Equipment is depreciated at an average amount of $3,000 per month.

Building
The current building was purchased on January 1, ten years ago and has an expected 40-year life at which time its salvage value will be $40,000.

Intangible Assets
Intangible assets were initially valued at $80,000 and are being depreciated over 40 years at $2,000 per year.

Short-Term Notes Payable
The one-year short-term notes payable are due on March 1, 20x3. The interest rate is 5.0% which is payable at maturity.

Long-Term Notes Payable
The long-term notes payable are due in ten years. The interest rate on the notes is 4.5%.

Bonds Payable
The bonds payable mature in twenty years. The interest rate on the bonds is 4.0%.

Mortgage Payable
The following amortization schedule can be used for the January, 20x3 mortgage payment on the 7.0%, 30- year mortgage.

Month   Payment   Interest   Principal   Balance

January  
$3,500  
$1,867  
$1,633   $320,000
$318,367

Capital Stock
The capital stock is common stock at $10 par value with 50,000 shares authorized, and 10,000 shares issued and outstanding.

Journal Entries

Jan 1 Equipment with a historical cost of $10,000 and an accumulated depreciation of $3,000 was sold for $6,000

Jan 2 Equipment with a historical cost of $20,000 and an accumulated depreciation of $18,000 was disposed of with an additional disposal cost of $1,300.

Jan 2 Sanford Company borrowed $24,000 on a short-term discounted 90 day, 3.0% noninterest-bearing note payable.

Jan 3 Sanford Company paid $18,000 in advance for the 6 month rental of a warehouse.

Jan 3 Equipment with a historical cost of $50,000 and an accumulated depreciation of $35,000 was traded for new similar equipment valued at $75,000. Sanford Company received $14,500 as a trade in for the old equipment, paid $7,500 and established a 4.5% long-term note payable for the balance due.

Jan 4 Equipment with a historical cost of $35,000 and an accumulated depreciation of $20,000 was traded for new dissimilar equipment valued at $60,000. The salvage value of the old equipment was $5,000 and the trade in value was $7,000. Sanford paid $4,000 for the equipment and established a 4.5% long-term note payable for the balance due.

Jan 5 Sanford Company declared a dividend of $2.00 per share payable on February 10, 20x3 to all shareholders of record on January 20, 20x3.

Jan 6 The amount in wages payable and taxes payable was paid in full.

Jan 8 Sanford Company paid a total of $18,000 on accounts payable and was able to take advantage of $1,500 in purchase discounts for early payment. The original inventory purchase was recorded at the full amount (gross method).

Jan 15 Cash sales for two weeks equaled $22,000. The cost of inventory sold equaled $12,000.

Jan 20 Supplies in the amount of $4,200 were purchased for cash.

Jan 21 A customer who owed $10,000 on an account receivable, agreed to sign a 60-day note receivable with an interest rate of 6.0%. The interest earned on the note will be paid at the maturity date of the note receivable.

Jan 29 The balance of $14,500 in accounts payable was paid.

Jan 30 The company purchased $45,000 of inventory on account with the terms 2/10, net 30. The company has decided to switch to the net method for all inventory purchases on account beginning in 20x3.

Jan 31 Cash sales for two weeks equaled $24,000. The cost of inventory sold equaled $13,000.

Jan 31 Sales on account for the month of January totaled $55,000 with the terms 2/10, net 30. The cost of inventory sold equaled $26,000.

Jan 31 The unearned revenue represented the rental of special equipment that was used by another company on weekends. $4,000 of the revenue was earned in January.

Jan 31 Collected cash of $48,000 from the accounts receivable, plus there was a total sales discount of $1,000 for the payment of receivables within the ten day discount period.

Jan 31 Salary expenses in the amount of $14,000 and tax expenses in the amount of $8,000 were paid.

Jan 31 The utility bill of $2,500 was paid.

Jan 31 A bill in the amount of $3,600 for advertising expenses incurred during the month of January was received.

Jan 31 The monthly payment for January of the mortgage payable was made.

Feb 1 The Sanford Company made a new issue of 5,000 shares of common stock for cash. The market price of the stock was $40 per share.

Feb 2 A petty cash fund in the amount of $500 was established.

Feb 3 The Sanford Company bought back 1,000 shares of its own common stock for $40 per share.

Feb 8 The purchase of inventory on account on Jan 30th was paid in full.

Feb 10 Sanford Company sold the note receivable from Jan 21st to the bank, which discounted the note at 8.0%.

Feb 15 Cash sales for two weeks equaled $20,000. The cost of inventory sold equaled $11,000.

Feb 20 The company purchases $20,000 of inventory on account with the terms 2/10, net 30.

Feb 27 The company paid an advertising bill for $5,600 which included the February advertising expense of $2,000 plus the balance due from January.

Feb 28 Cash sales for two weeks equaled $25,000. The cost of inventory sold equaled $14,000.

Feb 28 The monthly payment for February of the mortgage payable was made.

Feb 28 The company collected cash of $59,000 from the accounts receivable, plus there was a total sales discount of $1,100 for the payment of receivables within the ten day discount period.

Feb 28 Salary expenses in the amount of $21,000 and tax expenses in the amount of $9,000 were paid.

Feb 28 The utility bill of $2,100 was paid.

Feb 28 Sales on account for the month of February totaled $60,000 with the terms 2/10, net 30. The cost of inventory sold equaled $30,000.

Mar 1 The short-term note payable that was due on March 1st plus all appropriate interest was paid.

Mar 3 The amount of the petty cash fund was increased by $200.

Mar 10 Supplies in the amount of $2,700 were purchased for cash.

Mar 15 Cash sales for two weeks equaled $27,000. The cost of inventory sold equaled $15,000.

Mar 20 Sanford Company reissued 300 shares of its own stock for $42 per share.

Mar 21 The bank notified Sanford Company that the note receivable from January 21st had not been paid. The bank collected the amount of the note plus the interest due and a $20 protest fee from Sanford Company. Sanford Company charged the full amount of the note receivable plus related fees against the customer’s account receivable balance.

Mar 25 The company purchased $50,000 of inventory on account with the terms 2/10, net 30.

Mar 28 The purchase of inventory on account on Feb 20th was paid in full.

Mar 29 The petty cash fund had $150 in cash and receipts in total amounts for the following expense categories: entertainment$160, travel $170, postage $90, and supplies $115. The petty cash fund was replenished.

Mar 30 Cash sales for two weeks equaled $20,000. The cost of inventory sold equaled $11,000.

Mar 30 The unearned revenue represented the rental of special equipment that was used by another company on weekends. $9,000 of the revenue was earned in March.

Mar 31 Sales on account for the month of March totaled $67,000 with the terms 2/10, net 30. The cost of inventory sold equaled $36,000.

Mar 31 Salary expenses in the amount of $16,000 and tax expenses in the amount of $7,000 were paid.

Mar 31 Collected cash of $70,000 from the accounts receivable, plus there was a total sales discount of $1,200 for the payment of receivables within the ten day discount period.

Mar 31 A warehouse building was acquired for $250,000. Closing costs on the acquisition equaled $7,000, and there were costs of $10,300 to get the building into an operational condition to be used by Sanford Company. Employee salaries specifically related to the building renovation were an additional $5,400. This salary expense was part of the normal monthly expenses and would have been incurred regardless of whether the employees worked on the warehouse or did other activities within the company. Sanford Company paid $100,000 in cash as a down payment with the balance due being added to the mortgage payable account.

Mar 31 The utility bill of $3,000 was paid.

Mar 31 Sanford Company repaid the 90 day discounted note payable from January 2nd in full.

Mar 31 The equipment depreciation entry for the three months of 20x3 was completed.

Mar 31 The depreciation entry for the building for the months of January, February, and March was entered.

Mar 31 The amortization of intangible assets for the three months of 20x3 was completed.

Mar 31 The bad debt expense based on the aging schedule for accounts receivable was determined for the three month period.

Mar 31 Salary expenses incurred during the month of March but not yet paid equaled $8,400 and tax expenses equaled $2,800.

Mar 31 A physical inventory of supplies indicated a total amount of $5,000 of supplies still on hand.

Mar 31 A customer sent an advance payment of $10,000 for the use of special equipment in April and May.

Mar 31 The amount of rent expense for the warehouse for the first three months of 20x3 was recognized.

Mar 31 Sanford Company provided services to a customer in the amount of $3,000 during March but a bill has not been sent.

Mar 31 The amount of insurance expense for the first three months of 20x3 was recognized.

Mar 31 The amount of interest earned on marketable securities for the three months of 20x3 was recognized.

Mar 31 The amount of interest expense for the total long-term notes payable for the first three months of 20x3 was recognized.

Mar 31 The amount of interest expense for the bonds payable for the three months of 20x3 was recognized.

Mar 31 The monthly payment for March of the mortgage payable was made.

Required

1.  .

2.   Develop an income statement in good form for Sanford Company for the first three months of 20x3.

3.   y.

Multiple-Product Break-Even, Break-Even Sales Revenue

Switzer Company produces and sells yoga-training products: how-to DVDs and a basic equipment set (blocks, strap, and small pillows). Last year, Switzer sold 10,000 DVDs and 5,000 equipment sets. Information on the two products is as follows:

Total fixed costs are $70,000.

Suppose that in the coming year, Switzer plans to produce an extra-thick yoga mat for sale to health clubs. The company estimates that 20,000 mats can be sold at a price of $18 and a variable cost per unit of $13. Fixed costs must be increased by $48,350 (making total fixed costs of $118,350). Assume that anticipated sales of the other products, as well as their prices and variable costs, remain the same.

Required:

1. What is the sales mix of DVDs, equipment sets, and yoga mats?
2:1:4

2. Compute the break-even quantity of each product.

3. Prepare an income statement for Switzer for the coming year.

What is the overall contribution margin ratio? The overall break-even sales revenue? (Round the contribution margin ratio to the nearest whole percent; round the break-even sales revenue to the nearest dollar.)

4. Compute the margin of safety for the coming year in sales dollars.
$

ch8 exer #3

Potential customers can be drawn from a firm’s existing customers or non-customers. When would companies tap into its existing customers? New customers? How are the criteria used for customer selection different in the two situations?  

Prepare closing entries for Bagley Consulting Company. What is the net income for this accounting period? What is the balance of retained earnings after the closing? BAGLEY CONSULTING COMPANY Adjusted Trial Balance Account Title Debits Credits Cash $4,550 Accounts receivable 8,500 Prepaid insurance 1,750 Land 230,000 Buildings & Equipment 169,500 Accumulated depreciation—buildings & Equipment $79,350 Accounts payable 29,900 Salaries and wages payable 1,400 Deferred rent revenue 950 Common stock 250,000 Retained earnings 48,300 Sales revenue 86,500 Interest revenue 4,800 Rent revenue 5,050 Salaries and wages expense 36,400 Depreciation expense 11,550 Insurance expense 1,750 Utility expense 22,700 Maintenance expense 19,550 Totals $506,250 $506,250

Python Coding:

Working with Conditions and Dictionaries.

1. Create three dictionaries (student_1, student_2, student_3).

2. In each student dictionary have a key-value for first_name, last_name, and an id number (6 digit), and a current_course. The values assigned to each of these keys is your choice.

3. Also each student will have in their dictionary a list for grades. You will need to add 3 grade values into the list.

4. Provide the student with a message about each assignment grade based on the grade value.

For each of the grades for each assignment:

Provide a 90-100 grade message. My example used 'Congratulations'

Provide a 80-89 grade message. My example used 'Good job!'

Provide a 70-79 grade message. My example used 'You passed!'

Provide a 60-69 grade message. My example used 'Bad news, below average'

59 or lower grade message would be 'Failed.'

For each grade:

'You have made a {grade value} on assignment {assignment number}.

5. Print out each student's data as shown in the example output below:

Name: Smith, John   

Id: 646562   

Course: ITSE 1359

Grades: 86, 74, 94

Good job!

You have made a 86 on assignment 1.

You passed!

You have made a 74 on assignment 2.

Congratulations

You have made a 94 on assignment 3.

Conduct research to find a company that is successfully using JIT systems in its operations. (i) Describe the company briefly – product/services, locations, customers (ii) Describe the company’s operations briefly – type of process (iii) Describe how JIT is being used and how it has benefitted this company

The main objective of the financial statements is

With double-digit annual percentage increases in the cost of health insurance, more and more workers are likely to lack health insurance coverage (USA Today, January 23, 2004). The following sample data provide a comparison of workers with and without health insurance coverage for small, medium, and large companies. For the purposes of this study, small companies are companies that have fewer than 100 employees. Medium companies have 100 to 999 employees, and large companies have 1000 or more employees. Sample data are reported for 50 employees of small companies, 75 employees of medium companies, and 100 employees of large companies.

Health Insurance Size of Company Yes No Total Small 36 14 50 Medium 65 10 75 Large 88 12 100

Use the following information on Disney to answer the case questions.

◼ Disney’s current stock price is $140.00 per share. The average growth rate of the company’s dividend has been 17.7% from 2004 through 2018

◼ Disney’s return on equity is 28.0% and the company retains approximately 80.0% of its profits while paying out the remaining 20.0% in dividends.

◼ The company’s stock currently trades at 21.21 times its current year earnings estimate of $6.60 per share.

◼ Analysts expect the company to earn $6.19 per share in 2020 and $6.93 in 2021. ◼ Disney’s peers in media networks trade at 25.5 times their current year earnings estimates while peers in parks, experiences and consumer products at 21.9; studio entertainment at 19.1 and DTCI at 14.1.

◼ Assume the expected return for Disney’s stock is 6.9%.

What is Disney stock’s intrinsic value using The Constant Growth Model and the Multi-Stage Growth Model