The following is the post-closing trial balance for the Whitlow Manufacturing Corporation as of December 31, 2017.
| Account Title | Debits | Credits | ||||
| Cash | 4,400 | |||||
| Accounts receivable | 1,400 | |||||
| Inventory | 4,400 | |||||
| Equipment | 10,400 | |||||
| Accumulated depreciation—equipment | 2,900 | |||||
| Accounts payable | 2,400 | |||||
| Common stock | 9,000 | |||||
| Retained earnings | 6,300 | |||||
| Sales revenue | 0 | |||||
| Cost of goods sold | 0 | |||||
| Salaries and wages expense | 0 | |||||
| Rent expense | 0 | |||||
| Advertising expense | 0 | |||||
| Totals | 20,600 | 20,600 | ||||
The following transactions occurred during January 2018:
| Jan. | 1 | Sold merchandise for cash, $2,900. The cost of the merchandise was $1,400. The company uses the perpetual inventory system. | ||
| 2 | Purchased equipment on account for $4,900 from the Strong Company. | |||
| 4 | Received a $200 bill from the local newspaper for an advertisement that appeared in the paper on January 2. | |||
| 8 | Sold merchandise on account for $4,400. The cost of the merchandise was $2,200. | |||
| 10 | Purchased merchandise on account for $9,200. | |||
| 13 | Purchased equipment for cash, $900. | |||
| 16 | Paid the entire amount due to the Strong Company. | |||
| 18 | Received $4,000 from customers on account. | |||
| 20 | Paid $900 to the owner of the building for January’s rent. | |||
| 30 | Paid employees $2,400 for salaries and wages for the month of January. | |||
| 31 | Paid a cash dividend of $900 to shareholders. |
Post the transactions into the appropriate T-accounts. (Enter the date of the transaction in the column next to the amount. Be sure to include beginning balances.)
In: Accounting
The following is the post-closing trial balance for the Whitlow
Manufacturing Corporation as of December 31, 2017.
| Account Title | Debits | Credits | ||||
| Cash | 4,400 | |||||
| Accounts receivable | 1,400 | |||||
| Inventory | 4,400 | |||||
| Equipment | 10,400 | |||||
| Accumulated depreciation—equipment | 2,900 | |||||
| Accounts payable | 2,400 | |||||
| Common stock | 9,000 | |||||
| Retained earnings | 6,300 | |||||
| Sales revenue | 0 | |||||
| Cost of goods sold | 0 | |||||
| Salaries and wages expense | 0 | |||||
| Rent expense | 0 | |||||
| Advertising expense | 0 | |||||
| Totals | 20,600 | 20,600 | ||||
The following transactions occurred during January 2018:
| Jan. | 1 | Sold merchandise for cash, $2,900. The cost of the merchandise was $1,400. The company uses the perpetual inventory system. | ||
| 2 | Purchased equipment on account for $4,900 from the Strong Company. | |||
| 4 | Received a $200 bill from the local newspaper for an advertisement that appeared in the paper on January 2. | |||
| 8 | Sold merchandise on account for $4,400. The cost of the merchandise was $2,200. | |||
| 10 | Purchased merchandise on account for $9,200. | |||
| 13 | Purchased equipment for cash, $900. | |||
| 16 | Paid the entire amount due to the Strong Company. | |||
| 18 | Received $4,000 from customers on account. | |||
| 20 | Paid $900 to the owner of the building for January’s rent. | |||
| 30 | Paid employees $2,400 for salaries and wages for the month of January. | |||
| 31 | Paid a cash dividend of $900 to shareholders. |
Prepare general journal entries to record each transaction.
(If no entry is required for a transaction/event, select
"No journal entry required" in the first account
field.)
In: Accounting
The following selected transactions were completed by Amsterdam Supply Co., which sells office supplies primarily to wholesalers and occasionally to retail customers. Also note that the company uses a clearing house to take care of all bank as well as non-bank credit cards used by its customers.
Record on page 10 of the journal
| Mar. | 2 | Sold merchandise on account to Equinox Co., $18,900, terms FOB destination, 1/10, n/30. The cost of the goods sold was $13,300. |
| 3 | Sold merchandise for $11,350 plus 6% sales tax to retail cash customers. The cost of the goods sold was $7,000. | |
| 4 | Sold merchandise on account to Empire Co., $55,400, terms FOB shipping point, n/eom. The cost of the goods sold was $33,200. | |
| 5 | Sold merchandise for $30,000 plus 6% sales tax to retail customers who used MasterCard. The cost of the goods sold was $19,400. | |
| 12 | Received check for amount due from Equinox Co. for sale on March 2. | |
| 14 | Sold merchandise to customers who used American Express cards, $13,700. The cost of the goods sold was $8,350. | |
| 16 | Sold merchandise on account to Targhee Co., $27,500, terms FOB shipping point, 1/10, n/30. The cost of the goods sold was $16,000. | |
| 18 | Issued credit memo for $4,800 to Targhee Co. for merchandise returned from sale on March 16. The cost of the merchandise returned was $2,900. |
Record on page 11 of the journal
| Mar. | 19 | Sold merchandise on account to Vista Co., $8,250, terms FOB shipping point, 2/10, n/30. Added $75 to the invoice for prepaid freight. The cost of the goods sold was $5,000. |
| 26 | Received check for amount due from Targhee Co. for sale on March 16 less credit memo of March 18. | |
| 28 | Received check for amount due from Vista Co. for sale of March 19. | |
| 31 | Received check for amount due from Empire Co. for sale of March 4. | |
| 31 | Paid Fleetwood Delivery Service $5,600 for merchandise delivered during March to customers under shipping terms of FOB destination. | |
| Apr. | 3 | Paid City Bank $940 for service fees for handling MasterCard and American Express sales during March. |
| 15 | Paid $6,544 to state sales tax division for taxes owed on sales. |
Journalize the entries to record the transactions of Amsterdam Supply Co. Refer to the Chart of Accounts for exact wording of account titles.
| Amsterdam Supply Co. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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In: Accounting
Paint Inc. (PI) has been operating as a family owned private company for the past 30 years. It started as a company manufacturing paint for sale in its own retail stores in Ontario. PI is known as a manufacturer of high quality paint. Since then it has expanded with stores across Canada and recently started a decorating business. It has no desire to go public at this point in time and wants to keep accounting costs as low as possible.
With the recent real estate boom and new housing, the company has been very profitable for the past few years. PI has a loan with Canadian Bank. The bank requires audited financial statements and has a maximum debt to equity ratio.
You have recently been hired as an accounting consultant to assist PI’s board of directors. You have been asked to develop appropriate accounting policies for events that have occurred during 20X5. The board has asked that you explain fully your analysis for your recommendations. PI has a 31 December year end.
1. Individuals can purchase paint in the store or order on line. If they order on line they must pay by credit card. Contractors and real estate developers can purchase paint directly at the warehouse in bulk and receive a 15% to 25% discount depending on the quantity they purchase. They also have 30 days in which to pay. The paint provides a three month money back guarantee.
2. In the summer of 20X5, to encourage use of their new decorating services, PI offered customers a special deal. With the purchase of $200 of paint they received one hour of consulting advice from the decorator for free. Normally, the fee for the decorating service is $75 an hour. This deal was very popular with many customers purchasing additional services from the decorator beyond the one hour for free.
3. On 1 April 20X5, PI announced it was going to sell one of its older manufacturing facilities including all of the equipment. This facility will be replaced in a new location with a brand new, fully computerized, state of the art facility. The new facility will be operational in the spring of 20X6. Until that time PI will continue to manufacture in the existing facility. The facility has been listed at a reasonable price. The carrying amount of the facility and equipment is $1,000,000 with a fair value of $850,000. The land has a carrying amount of $200,000 and a fair value of $1,200,000.
4. In 20X5, PI traded a piece of excess land they owned for a potential new store for some manufacturing equipment for the new facility. The land had a carrying amount of $80,000, but three real estate appraisals estimated the fair value to be $500,000. The equipment was specially manufactured for PI and is unique.
5. In 20X5, PI sold a large quantity of paint to a board member who owns a new housing development. The paint was sold to the director for cash and the director was given a 25% discount and 30 days to pay.
6. In February 20X6, PI was informed that one of its building contractors went bankrupt and will not be able to pay an outstanding receivable of $80,000. This receivable was not considered in determining their allowance for bad debts for 20X5.
Required:
Prepare the report.
In: Accounting
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In: Accounting
The following CVP income statements are available for Blanc Company
and Noir Company.
|
Blanc Company |
Noir Company |
|||
| Sales | $529,000 | $529,000 | ||
| Variable costs | 296,240 | 185,150 | ||
| Contribution margin | 232,760 | 343,850 | ||
| Fixed costs | 165,000 | 276,090 | ||
| Net income | $67,760 | $67,760 |
Calculate Contribution margin ratio. (Round answers to 2 decimal places, e.g. 0.32.)
|
Contribution Margin Ratio |
||
| Blanc Company | ||
| Noir Company |
Compute break-even point in dollars for each company. (Round answers to 0 decimal places, e.g. 1,225.)
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Break-even Point |
||
| Blanc Company |
$ |
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| Noir Company |
$ |
Compute margin of safety ratio for each company. (Round answers to 3 decimal places, e.g. 0.321.)
|
Margin of Safety Ratio |
||
| Blanc Company | ||
| Noir Company |
Compute the degree of operating leverage for each company. (Round answers to 1 decimal place, e.g. 1.5.)
|
Degree of Operating Leverage |
||
| Blanc Company | ||
| Noir Company |
Assuming that sales revenue increases by 20%, prepare a CVP income statement for each company. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round answers to 0 decimal places, e.g. 1,225.)
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Blanc Company |
Noir Company |
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| Sales |
$ |
$ |
||
| Variable costs | ||||
| Contribution margin | ||||
| Fixed costs | ||||
| Net income / (Loss) |
$ |
$ |
Assuming that sales revenue decreases by 20%, prepare a CVP income statement for each company. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round answers to 0 decimal places, e.g. 1,225.)
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Blanc Company |
Noir Company |
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| Sales |
$ |
$ |
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| Variable costs | ||||
| Contribution margin | ||||
| Fixed costs | ||||
| Net income / (Loss) |
$ |
$ |
In: Accounting
On January 1, 2020, Flounder Company acquires $130,000 of Spiderman Products, Inc., 9% bonds at a price of $120,632. Interest is received on January 1 of each year, and the bonds mature on January 1, 2023. The investment will provide Flounder Company a 12% yield. The bonds are classified as held-to-maturity.
(a)
Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the straight-line method. (Round answers to 0 decimal places, e.g. 2,500.)
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Schedule of Interest Revenue and Bond Discount
Amortization |
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|---|---|---|---|---|---|---|---|---|
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Cash |
Interest |
Bond Discount |
Carrying Amount |
||||
| 1/1/20 |
$enter a dollar amount |
$enter a dollar amount |
$enter a dollar amount |
$enter a dollar amount |
||||
| 1/1/21 |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
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| 1/1/22 |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
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| 1/1/23 |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
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eTextbook and Media
Attempts: 0 of 3 used
Using multiple attempts will impact your score.
20% score reduction after attempt 2
(b)
The parts of this question must be completed in order. This part will be available when you complete the part above.
(c) and (d)
The parts of this question must be completed in order. This part will be available when you complete the part above.
In: Accounting
|
Holt Manufacturing |
||
|
For the year ended December 31 2017 |
||
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Beginning raw materials inventory |
210,000 |
|
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Ending raw materials inventory |
30,000 |
|
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Purchases of raw materials |
552,000 |
|
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Direct labor |
408,000 |
|
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Indirect manufacturing labor |
120,000 |
|
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Depreciation of factory equipment |
240,000 |
|
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Factory Rent |
60,000 |
|
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Rent on sales offices |
24,000 |
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Factory utilities |
45,000 |
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Property taxes on factory premises |
15,000 |
|
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Maintenance of factory equipment |
60,000 |
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Beginning work in process inventory |
180,000 |
|
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Ending work in process inventory |
420,000 |
|
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Beginning finished goods inventory |
270,000 |
|
|
Ending finished goods inventory |
150,000 |
|
|
Sales representative salaries |
84,000 |
|
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Distribution costs |
114,000 |
|
|
Interest expense |
8,000 |
|
|
Sales revenue |
2,000,000 |
|
|
Tax rate if pre-tax income/profit is less than |
100,000 |
10% |
|
Tax rate if income/profit is at least |
100,000 |
20% |
Your basic financial model is complete but you must learn to adjust it for data errors. The accountant for Holt Manufacturing has discovered the following errors in the accounting estimates for the year ended December 31, 2017:
1. The annual interest expense was $4,800, not $8,000 as per the original data sheet.
2. The annual insurance charge expense for the factory was $30,000. This was omitted from the original list of expenses in the data sheet. Add this extra manufacturing overhead to your "data" sheet.
3. Administrative salaries of $18,000 were also omitted. Add this to the "data" sheet and include a formula and extra line item in your income statement.
4. The accountant failed to account for the factory utilities rebate the company receives from using renewable energy sources. The rebate has both a fixed and percentage element ($1,500 + 10% of the total annual utilities cost), and should be deducted from the utilities overhead cost at the year end. The amount of the rebate is negotiable with the energy company, so you must allow for its adjustment in your Excel workbook.
5. The company gives customers a 1.5% sales discount, but this has not been accounted for. As a result, total sales annual revenue must be reduced by the amount of the discount. The discount rate may change in the future, so must be added to the original data sheet as a key variable, and the amounts of both gross and net revenue must be shown as line items in the income statement. `
6. The income tax threshold is as follows: 10% tax rate is applicable for up to $100,000 of net income for the year and 20%, if the income is more than $100,000. Modify your data sheet and formulae to reflect this change.
7. Add a comment box to the Net Income/Loss cell that explains the impact that changes (i) to (vi) have on reported net income - does the company now report a net income or loss for 2017? Make sure this comment box is visible and printed on your worksheet.
8. The accountant wishes you to provide an analysis of the company’s operating cost structure. Add an extra worksheet called “Cost analysis”, and construct a suitable table of the company operating costs (i.e. cost of sale, selling, admin and distribution costs) from the income statement for 2016. Link you table with the income statement entries. Do not hard code this data.
In: Accounting
Please see the below for a fictitious example of consideration of balanced scorecard performance measures.
For each measure, indicate whether it would most like be classified in the learning and growth, internal business process, customer, or financial category of the company's balance scorecard.
| Item | Description | Learning & Growth | Internal Business Process | Customer | Financial |
| 1 | Sales from new customers | ||||
| 2 | Customer defection rate | ||||
| 3 | Average fuel cost per sales dollar | ||||
| 4 | Average number of workplace accidents per employee | ||||
| 5 | Delivery cycle time | ||||
| 6 | Average training hours per employee | ||||
| 7 | Number of job applicants from under-represented groups | ||||
| 8 | Percent of customers that strongly agree with the statement "Your employees treated me courteously." | ||||
| 9 | Return on assets | ||||
| 10 | Percent of customers that strongly agree with the statement "Your company has a superior commitment to product safety." | ||||
| 11 | Number of modular product designs | ||||
| 12 | Lost sales due to out-of-stock merchandise | ||||
| 13 | Pounds of waste produced | ||||
| 14 | Number of customer referrals | ||||
| 15 | Residual income | ||||
| 16 | Average mentorship hours per employee |
In: Accounting
Europa Publications, Inc. specializes in reference books that keep abreast of the rapidly changing political and economic issues in Europe. The results of the company’s operations during the prior year are given in the following table. All units produced during the year were sold. (Ignore income taxes.)
|
Sales revenue |
$ |
1,500,000 |
|
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Manufacturing costs: |
|||
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Fixed |
400,000 |
||
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Variable |
715,000 |
||
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Selling costs: |
|||
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Fixed |
30,000 |
||
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Variable |
60,000 |
||
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Administrative costs: |
|||
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Fixed |
70,000 |
||
|
Variable |
25,000 |
||
Required:
1-a. Prepare a traditional income statement for the company.
1-b. Prepare a contribution income statement for the company.
2. What is the firm’s operating leverage for the sales volume generated during the prior year?
3. Suppose sales revenue increases by 12 percent. What will be the percentage increase in net income?
4. Which income statement would an operating manager use to answer requirement (3)?
Req. 1-a.
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Req. 1-b.
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Req. 2
What is the firm’s operating leverage for the sales volume generated during the prior year? (Round your answer to 2 decimal places.)
|
Req. 3
Suppose sales revenue increases by 12 percent. What will be the percentage increase in net income? (Do not round intermediate calculations. Round your answer to 1 decimal place.)
|
Req. 4
Which income statement would an operating manager use to answer requirement (3)?
|
In: Accounting