Inventory records for a company revealed the following:

Date Transaction Number of Units Unit Cost

Apr. 1 Beginning inventory 500 $2.40

Apr. 20 Purchase 400 $2.50

The company sold 700 units of inventory during the month. Cost of goods sold assuming FIFO would be:

If management can estimate the amount of loss that will occur due to litigation against the company, and the likelihood of the loss is reasonably possible, a contingent liability should be

On December 31, 2018, a company had balances in Accounts Receivable of $53,600 (debit) and in Allowance for Uncollectible Accounts of $1,325 (credit). During 2019, the company wrote off $1,465 in accounts receivable and determined that there should be an allowance for uncollectible accounts of $1,280 at December 31, 2019. Bad debt expense for 2019 would be:

On August 10th, a company billed a customer for services that were provided on August 5th. Which of the following should be recorded on August 10th?

An example of an adjusting entry would include:

if you could please post your work/reasoning, that'd be great!! thank you!

In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2023. Information related to the contract is as follows:

Assume that Westgate Construction’s contract with Santa Clara County does not qualify for revenue recognition over time.

Required:
1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.
2-a. In the journal below, complete the necessary journal entries for the year 2021 (credit "Various accounts" for construction costs incurred).
2-b. In the journal below, complete the necessary journal entries for the year 2022 (credit "Various accounts" for construction costs incurred).
2-c. In the journal below, complete the necessary journal entries for the year 2023 (credit "Various accounts" for construction costs incurred).
3. Complete the information required below to prepare a partial balance sheet for 2021 and 2022 showing any items related to the contract.
4. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information.

5. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information.

LearningExchange Ltd offers specialised exchange programs for Australian students to live overseas and study in a local school from two to twelve months. The company’s exchange programs also include local tours. The sales and direct cost data on the two popular programs for last year are as follows:
Thailand New Zealand Number of exchange programs sold 10 15 Number of students per program 6 6 Revenue per student $14,000 $17,000 Direct cost per program: Program leaders' salary (percentage of revenue per program) 5% 7% Program assistant salary $5,000 $6,000 Local school fees (percentage of revenue per program) 25% 30% Local tour guides $2,000 $4,200 Air travel cost $4,500 $1,900 Accommodation and meals $20,000 $38,000 Insurance $2,100 $2,200

The overhead costs for the last year as follows:
Managers' salaries $100,000 Sales personnel salaries $120,000 Rent and property taxes $22,000 Utilities $8,000 Depreciation on equipment $6,000 Other operating costs $9,000

To calculate the profitability of each exchange program, overheads are allocated to each program in proportion to the actual sales revenue.

Required: 1. Calculate the contribution of each tour package towards the overall profit of the company. [10 marks]
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2. Should the company keep on offering both tour packages? Explain and support your answer with necessary calculations. [1 mark]
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3. Do you consider the company’s overhead allocation method to be appropriate or would you suggest an alternative? Explain. [1 mark]
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4. What should the company do to improve the profitability of each exchange program? Provide some suitable examples

AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February: Fixed Component per Month Variable Component per Job Actual Total for February Revenue $ 276 $ 38,650 Technician wages $ 8,500 $ 8,350 Mobile lab operating expenses $ 4,900 $ 33 $ 9,690 Office expenses $ 2,500 $ 2 $ 2,650 Advertising expenses $ 1,580 $ 1,650 Insurance $ 2,890 $ 2,890 Miscellaneous expenses $ 950 $ 2 $ 555 The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,900 plus $33 per job, and the actual mobile lab operating expenses for February were $9,690. The company expected to work 150 jobs in February, but actually worked 160 jobs. Required: Prepare a flexible budget performance report showing AirQual Test Corporation’s revenue and spending variances and activity variances for February. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Prepare a flexible budget performance report showing AirQual Test Corporation’s revenue and spending variances and activity variances for February. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Ellie Mosk, CEO of X-Space Industries, decided to expand the company’s product offering beyond the core model rocket business. After investigation, she decided to set up a separate division to design and manufacture products for the drone market. Several companies were interested in having X-Space develop these drones, and financial results, to date, have been encouraging. Revenue was $4 million, gross margins have been running about 40%, and the customer sales and support costs were $1 million. However, there is a growing concern that some customers require a disproportionate share of the sales and support resources, and the true profitability of the customers is unknown. Data were collected to support an analysis of customer profitability: Activity Cost Driver Total Cost Sales visits Sales visit days $ 491,000 Product modifications Number of modifications 275,000 Phone calls Number of minutes 93,500 E-mail/electronic communications Number of communications 177,000 $ 1,036,500 Customer Revenue Gross Profit Visit Days Modifications Phone Minutes Electronic Communications A $ 405,000 $ 155,000 15 15 1,180 625 B 505,000 205,000 25 15 1,270 875 C 605,000 235,000 40 40 1,520 1,150 D 1,150,000 425,000 90 60 1,870 2,150 E 1,550,000 595,000 100 70 2,270 2,400 Totals $ 4,215,000 $ 1,615,000 270 200 8,110 7,200 Required: 1. Management felt the easiest way to allocate the sales and support costs was based on the total revenue. Using total revenue as the allocation base, determine the profitability of each of the five customers. 2. Management felt that because the data revealed some customers require a disproportionate share of sales and support resources, activity-based costing should be used to determine customer profitability. Use ABC to prepare a customer profitability analysis.

Jac Flyhigh is Chair of the Board of Exeed Company. The company has been experiencing growth placing a strain on finances and increasing levels of risk. Despite having put in place a budget that predicted a profit of $1m, expenditure has blown out over the year and the company is potentially going to record a loss of $360,000. In order to be able to report a profit to shareholders the Chief Financial Officer is proposing that the company recognise additional revenue of $658,000 ($205,000 and $453,00) after taking in consideration what is outlined in a and b below.   

a. the company recognise all of an amount of revenue of $205,000 received as sponsorship from a company called Mainrite Ltd. The contract with Mainrite specifies that Exeed will incur expenditure to acknowledge, through signage and promotional materials at company activities and events, the Mainrite contribution. At end of financial year services to the value of $125,000 have been delivered on this contract.

b. the company recognises a gain on the sale of an asset (under contract) of $453,000 even though the sale had not been completed by the end of the financial year. He states that recognising the gain now is relevant since the contract is in place.   

The CFO states that recognising the extra revenue now is relevant and convinces Jac Flyhigh to sign a director’s declaration indicating that the financial statements ‘are true and fair’.

1. In relation to accounting standard AASB15, is the CFO correct in recognising the amount of $205,000 as revenue in the current period and why?

2. Does a conflict exist between relevance and faithful representation in situation b and why?

3. What does it mean to say that the financial statements are ‘true and fair’?   

4. What final profit or loss figure would you think should be recognised and why?  

5. Reflect on what you would have done to ensure good corporate governance in relation to the director’s declaration in this case if you were Jac Flyhigh.

Ellie Mosk, CEO of X-Space Industries, decided to expand the company’s product offering beyond the core model rocket business. After investigation, she decided to set up a separate division to design and manufacture products for the drone market. Several companies were interested in having X-Space develop these drones, and financial results, to date, have been encouraging. Revenue was $4 million, gross margins have been running about 40%, and the customer sales and support costs were $1 million. However, there is a growing concern that some customers require a disproportionate share of the sales and support resources, and the true profitability of the customers is unknown. Data were collected to support an analysis of customer profitability:

Required:

1. Management felt the easiest way to allocate the sales and support costs was based on the total revenue. Using total revenue as the allocation base, determine the profitability of each of the five customers.

2. Management felt that because the data revealed some customers require a disproportionate share of sales and support resources, activity-based costing should be used to determine customer profitability. Use ABC to prepare a customer profitability analysis.