On January 1, 2020, the Hardin Company budget committee has
reached agreement on the following data for the 6 months ending
June 30, 2020.
| Sales units: | First quarter 5,400; second quarter 6,100; third quarter 7,900. | |
| Ending raw materials inventory: | 40% of the next quarter’s production requirements. | |
| Ending finished goods inventory: | 25% of the next quarter’s expected sales units. | |
| Third-quarter production: | 7,430 units. |
The ending raw materials and finished goods inventories at December
31, 2019, follow the same percentage relationships to production
and sales that occur in 2020. 5 pounds of raw materials are
required to make each unit of finished goods. Raw materials
purchased are expected to cost $6 per pound.
Prepare a production budget by quarters for the 6-month period ended June 30, 2020.
|
HARDIN COMPANY |
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| Quarter | ||||||
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1 |
2 |
Six |
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Required Production UnitsDirect Materials Per UnitDesired Ending Direct MaterialsTotal Materials RequiredDirect Materials PurchasesTotal Required UnitsExpected Unit SalesDesired Ending Finished Goods UnitBeginning Finished Goods UnitBeginning Direct Materials |
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AddLess: Direct Materials PurchasesTotal Required UnitsExpected Unit SalesDesired Ending Direct MaterialsTotal Materials RequiredDirect Materials Per UnitRequired Production UnitsBeginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Finished Goods Unit |
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Total Required UnitsExpected Unit SalesBeginning Direct MaterialsBeginning Finished Goods UnitDirect Materials Per UnitDirect Materials PurchasesRequired Production UnitsTotal Materials RequiredDesired Ending Finished Goods UnitDesired Ending Direct Materials |
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AddLess: Desired Ending Finished Goods UnitBeginning Finished Goods UnitTotal Required UnitsDirect Materials Per UnitRequired Production UnitsBeginning Direct MaterialsExpected Unit SalesDesired Ending Direct MaterialsDirect Materials PurchasesTotal Materials Required |
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Desired Ending Direct MaterialsDirect Materials PurchasesTotal Required UnitsBeginning Direct MaterialsRequired Production UnitsDirect Materials Per UnitDesired Ending Finished Goods UnitTotal Materials RequiredBeginning Finished Goods UnitExpected Unit Sales |
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eTextbook and Media
Prepare a direct materials budget by quarters for the 6-month period ended June 30, 2020.
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HARDIN COMPANY |
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Quarter |
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1 |
2 |
Six Months |
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Cost Per PoundUnits to be ProducedDirect Materials PurchasesTotal Direct Labor CostTotal Materials RequiredDesired Ending Direct Materials (Pounds)Direct Labor Time Per UnitTotal Pounds Needed for ProductionTotal Required Direct Labor HoursTotal Cost of Direct Materials PurchasesDirect Materials Per UnitBeginning Direct Materials (Pounds)Direct Labor Cost Per Hour |
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Total Materials RequiredTotal Required Direct Labor HoursDirect Labor Cost Per HourDirect Labor Time Per UnitCost Per PoundDesired Ending Direct Materials (Pounds)Direct Materials PurchasesTotal Direct Labor CostTotal Pounds Needed for ProductionUnits to be ProducedBeginning Direct Materials (Pounds)Total Cost of Direct Materials PurchasesDirect Materials Per Unit |
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Direct Materials Per UnitTotal Materials RequiredDesired Ending Direct Materials (Pounds)Total Pounds Needed for ProductionCost Per PoundBeginning Direct Materials (Pounds)Direct Labor Cost Per HourTotal Required Direct Labor HoursTotal Cost of Direct Materials PurchasesDirect Labor Time Per UnitTotal Direct Labor CostDirect Materials PurchasesUnits to be Produced |
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AddLess: Units to be ProducedDirect Labor Cost Per HourDirect Materials PurchasesTotal Required Direct Labor HoursTotal Materials RequiredTotal Cost of Direct Materials PurchasesDirect Materials Per UnitDesired Ending Direct Materials (Pounds)Cost Per PoundBeginning Direct Materials (Pounds)Total Pounds Needed for ProductionTotal Direct Labor CostDirect Labor Time Per Unit |
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In: Accounting
1. On January 1, 2020, Scottsdale Company issued its 12% bonds in the face amount of $3,000,000, which mature on January 1, 2032. The bonds were issued for $$3,408,818 to yield 10%. Scottsdale uses the effective-interest method of amortizing bond premium. Interest is payable annually on December 31. The 12/31/23 Premium on Bond Payable balance is:
(show computations)
In: Accounting
Gundy Company expects to produce 1,310,400 units of Product XX
in 2020. Monthly production is expected to range from 83,000 to
113,000 units. Budgeted variable manufacturing costs per unit are
direct materials $4, direct labor $8, and overhead $11. Budgeted
fixed manufacturing costs per unit for depreciation are $4 and for
supervision are $2.
Prepare a flexible manufacturing budget for the relevant range
value using 15,000 unit increments. (List variable
costs before fixed costs.)
|
GUNDY COMPANY |
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|---|---|---|---|---|---|
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Select an opening flexible manufacturing budget item Total CostsDepreciationSupervisionFinished UnitsTotal Fixed CostsOverheadDirect MaterialsFixed CostsActivity LevelVariable CostsDirect LaborTotal Variable Costs |
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|
Select a budget item Direct MaterialsTotal CostsSupervisionTotal Fixed CostsFixed CostsDirect LaborOverheadActivity LevelTotal Variable CostsVariable CostsDepreciationFinished Units |
Enter a number |
Enter a number |
Enter an amount |
||
|
Select an opening name for section one SupervisionActivity LevelFinished UnitsVariable CostsTotal CostsFixed CostsOverheadTotal Fixed CostsDirect LaborTotal Variable CostsDepreciationDirect Materials |
|||||
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Select a budget item Direct LaborDirect MaterialsTotal Variable CostsTotal CostsVariable CostsOverheadSupervisionActivity LevelFixed CostsFinished UnitsTotal Fixed CostsDepreciation |
$Enter a dollar amount |
$Enter a dollar amount |
$Enter a dollar amount |
||
|
Select a budget item Total Variable CostsDirect LaborDepreciationTotal Fixed CostsFixed CostsTotal CostsActivity LevelOverheadFinished UnitsSupervisionDirect MaterialsVariable Costs |
Enter a dollar amount |
Enter a dollar amount |
Enter a dollar amount |
||
|
Select a budget item Total Variable CostsTotal Fixed CostsTotal CostsDepreciationActivity LevelOverheadDirect MaterialsVariable CostsFixed CostsFinished UnitsDirect LaborSupervision |
Enter a dollar amount |
Enter a dollar amount |
Enter a dollar amount |
||
|
Select a closing name for section one Variable CostsSupervisionOverheadTotal Variable CostsFinished UnitsFixed CostsDirect MaterialsDepreciationTotal Fixed CostsDirect LaborActivity LevelTotal Costs |
$Enter a total amount for section one |
$Enter a total amount for section one |
$Enter a total amount for section one |
||
|
Select an opening name for section two Activity LevelFixed CostsDirect MaterialsTotal Variable CostsDirect LaborVariable CostsFinished UnitsTotal Fixed CostsSupervisionDepreciationTotal CostsOverhead |
|||||
|
Select a budget item Direct MaterialsDepreciationTotal Fixed CostsDirect LaborVariable CostsTotal Variable CostsSupervisionActivity LevelOverheadFinished UnitsTotal CostsFixed Costs |
Enter a dollar amount |
Enter a dollar amount |
Enter a dollar amount |
||
|
Select a budget item Fixed CostsSupervisionDepreciationTotal Fixed CostsVariable CostsTotal CostsDirect MaterialsActivity LevelFinished UnitsOverheadDirect LaborTotal Variable Costs |
Enter a dollar amount |
Enter a dollar amount |
Enter a dollar amount |
||
|
Select a closing name for section two Total Variable CostsFixed CostsDirect LaborVariable CostsFinished UnitsSupervisionDirect MaterialsTotal CostsActivity LevelTotal Fixed CostsDepreciationOverhead |
Enter a total amount for section two |
Enter a total amount for section two |
Enter a total amount for section two |
||
|
Select a closing flexible manufacturing budget item Finished UnitsTotal Fixed CostsDepreciationDirect MaterialsOverheadActivity LevelSupervisionVariable CostsTotal Variable CostsFixed CostsDirect LaborTotal Costs |
$Enter a total dollar amount |
$Enter a total dollar amount |
$Enter a total dollar amount |
||
In: Accounting
On January 1, 2020 company issued $ 1.5 million of five year, 6% convertible bonds at par value. Each $ 1000 bond is convertible into 100 common shares. A similar bond (without conversion feature) would have been issued at a market yield of 9%. In the same year on December 31, $ 2000,000 worth of bonds were converted to common shares.
Required: Calculate the value of the bond according to IFRS and ASPE and also show the journal entries. The measurement of the bond should be done according to IFRS and ASPE. Does this has any effect on the debt to equity ratio of the company.
In: Accounting
Beck Construction Company began work on a new building project
on January 1, 2020. The project is to be completed by December 31,
2022, for a fixed price of $171 million. The following are the
actual costs incurred and estimates of remaining costs to complete
the project that were made by Beck's accounting staff:
| Years | Actual costs incurred in each year | Estimated remaining costs to complete the project (measured at Dec. 31 of each year) |
||||
| 2020 | $ | 47 | million | $ | 94 | million |
| 2021 | $ | 79 | million | $ | 79 | million |
| 2022 | $ | 52 | million | $ | 0 | |
Required:
What amount of gross profit (or loss) would Beck record on this
project in each year, assuming that Beck recognizes revenue for
this project upon completion of the project? (Loss amounts
should be indicated with a minus sign. Enter your answers in
millions (i.e., 10,000,000 should be entered as
10).)
In: Accounting
East Company has the following ledger accounts and adjusted balances as of December 31, 2020. All accounts have normal balances. East’s income tax rate is 20%. East has 300,000 shares of $10 par Common Stock authorized and 85,000 shares of Common Stock outstanding.
Accounts Payable……………………………. 87,750
Accounts Receivable………………………… 707,100
Accumulated Depreciation-Building………… 168,750
Accumulated Depreciation-Equipment………. 140,000
Administrative Expenses……………………. 150,000
Allowance for Doubtful Accounts…………… 67,500
Bonds Payable……………………………….. 600,000
Building……………………………………..1,687,500
Cash…………………………………………. 97,750
Common Stock……………………………... 900,000
Cost of Goods Sold………………………….1,282,500
Dividends…………………………………… 75,000
Equipment…………………………………… 652,500
Income from Operations of Division Y…….. 135,000
(Division Y is a component of East Company)
Interest Revenue…………………………….. 90,000
Inventory……………………………………...945,000
Land (held for future use)...…………………. 675,000
Land (used for building)…………………….. 371,250
Loss from Sale of Division Y……………….. 270,000
(Division Y is a component of East Company)
Loss on Sale of Land……...…………………. 33,750
Mortgage Payable …………..………………. 813,550*
Paid-In Capital in Excess of Par…………….. 594,000
Premium on Bonds Payable……………...… 15,000
Prepaid Insurance……………………………. 33,750**
Retained Earnings, January 1, 2019………… 843,750
Sales Discounts………………………………. 43,500
Sales Returns and Allowances……………….112,500
Sales Revenue……………………………...3,453,750
Selling Expenses……………………………. 416,750
Trademark……………………………………101,250
Treasury Stock………………………………. 90,000
*$50,000 of the principal comes due in 2019.
**Two years insurance paid in advance.
Instructions:
Use this information to prepare a multiple-step income statement, a retained earnings statement, and a classified balance sheet.
In: Accounting
Headland Inc., a greeting card company, had the following statements prepared as of December 31, 2020.
|
HEADLAND INC. |
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|---|---|---|---|---|---|---|
|
12/31/20 |
12/31/19 |
|||||
|
Cash |
$6,100 |
$6,900 |
||||
|
Accounts receivable |
62,500 |
51,000 |
||||
|
Short-term debt investments (available-for-sale) |
34,800 |
18,100 |
||||
|
Inventory |
39,600 |
60,200 |
||||
|
Prepaid rent |
4,900 |
4,000 |
||||
|
Equipment |
154,500 |
130,100 |
||||
|
Accumulated depreciation—equipment |
(34,800 |
) |
(25,300 |
) |
||
|
Copyrights |
46,300 |
50,400 |
||||
|
Total assets |
$313,900 |
$295,400 |
||||
|
Accounts payable |
$46,000 |
$40,200 |
||||
|
Income taxes payable |
4,000 |
6,000 |
||||
|
Salaries and wages payable |
8,100 |
4,000 |
||||
|
Short-term loans payable |
8,000 |
10,000 |
||||
|
Long-term loans payable |
59,700 |
69,000 |
||||
|
Common stock, $10 par |
100,000 |
100,000 |
||||
|
Contributed capital, common stock |
30,000 |
30,000 |
||||
|
Retained earnings |
58,100 |
36,200 |
||||
|
Total liabilities & stockholders’ equity |
$313,900 |
$295,400 |
||||
|
HEADLAND INC. |
||||
|---|---|---|---|---|
|
Sales revenue |
$339,075 |
|||
|
Cost of goods sold |
175,000 |
|||
|
Gross profit |
164,075 |
|||
|
Operating expenses |
119,900 |
|||
|
Operating income |
44,175 |
|||
|
Interest expense |
$11,300 |
|||
|
Gain on sale of equipment |
2,000 |
9,300 |
||
|
Income before tax |
34,875 |
|||
|
Income tax expense |
6,975 |
|||
|
Net income |
$27,900 |
|||
Additional information:
| 1. | Dividends in the amount of $6,000 were declared and paid during 2020. | |
| 2. | Depreciation expense and amortization expense are included in operating expenses. | |
| 3. | No unrealized gains or losses have occurred on the investments during the year. | |
| 4. | Equipment that had a cost of $19,900 and was 70% depreciated was sold during 2020. |
Prepare a statement of cash flows using the direct method.
(Show amounts in the investing and financing sections
that decrease cash flow with either a - sign e.g. -15,000 or in
parenthesis e.g. (15,000).)
|
HEADLAND INC. |
|---|
In: Accounting
Presented below is information related to equipment owned by Whispering Company at December 31, 2020.
| Cost | $9,990,000 | |
| Accumulated depreciation to date | 1,110,000 | |
| Expected future net cash flows | 7,770,000 | |
| Fair value | 5,328,000 |
Whispering intends to dispose of the equipment in the coming year.
It is expected that the cost of disposal will be $22,200. As of
December 31, 2020, the equipment has a remaining useful life of 4
years.
Correct answer iconYour answer is correct.
Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
| Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
Dec. 31 |
enter an account title to record the transaction on December 31, 2017 |
enter a debit amount |
enter a credit amount |
|
enter an account title to record the transaction on December 31, 2017 |
enter a debit amount |
enter a credit amount |
eTextbook and Media
List of Accounts
New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is partially correct.
Prepare the journal entry (if any) to record depreciation expense for 2021. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
|
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|
|
enter an account title |
enter a debit amount |
enter a credit amount |
|
enter an account title |
enter a debit amount |
enter a credit amount |
eTextbook and Media
List of Accounts
Incorrect answer iconYour answer is incorrect.
The asset was not sold by December 31, 2021. The fair value of the equipment on that date is $5,883,000. Prepare the journal entry (if any) necessary to record this increase in fair value. It is expected that the cost of disposal is still $22,200. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
| Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
Dec. 31 |
enter an account title to record the transaction on December 31, 2018 |
enter a debit amount |
enter a credit amount |
|
enter an account title to record the transaction on December 31, 2018 |
enter a debit amount |
In: Accounting
The stockholders’ equity accounts of Carla Company have the following balances on December 31, 2020.
| Common stock, $10 par, 288,000 shares issued and outstanding | $2,880,000 | |
| Paid-in capital in excess of par—common stock | 1,180,000 | |
| Retained earnings | 5,750,000 |
Shares of Carla Company stock are currently selling on the Midwest
Stock Exchange at $38.
Prepare the appropriate journal entries for each of the following
cases. (Credit account titles are automatically
indented when amount is entered. Do not indent manually. If no
entry is required, select "No Entry" for the account titles and
enter 0 for the amounts.)
| (a) | A stock dividend of 7% is (1) declared and (2) issued. | |
|---|---|---|
| (b) | A stock dividend of 100% is (1) declared and (2) issued. | |
| (c) | A 2-for-1 stock split is (1) declared and (2) issued. |
|
No. |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
(a) (1) |
enter an account title for case A to record the declaration of stock dividends |
enter a debit amount |
enter a credit amount |
|
enter an account title for case A to record the declaration of stock dividends |
enter a debit amount |
enter a credit amount |
|
|
enter an account title for case A to record the declaration of stock dividends |
enter a debit amount |
enter a credit amount |
|
|
(a) (2) |
enter an account title for case A to record the issuance of stock dividends |
enter a debit amount |
enter a credit amount |
|
enter an account title for case A to record the issuance of stock dividends |
enter a debit amount |
enter a credit amount |
|
|
(b) (1) |
enter an account title for case B to record the declaration of stock dividends |
enter a debit amount |
enter a credit amount |
|
enter an account title for case B to record the declaration of stock dividends |
enter a debit amount |
enter a credit amount |
|
|
(b) (2) |
enter an account title for case B to record the issuance of stock dividends |
enter a debit amount |
enter a credit amount |
|
enter an account title for case B to record the issuance of stock dividends |
enter a debit amount |
enter a credit amount |
|
|
(c) (1) |
enter an account title for case C to record the declaration of the stock split |
enter a debit amount |
enter a credit amount |
|
enter an account title for case C to record the declaration of the stock split |
enter a debit amount |
enter a credit amount |
|
|
(c) (2) |
enter an account title for case C to record the issuance of the stock split |
enter a debit amount |
enter a credit amount |
|
enter an account title for case C to record the issuance of the stock split |
enter a debit amount |
enter a credit amount |
In: Accounting
On January 1, 2020, Sarasota Company purchased $432,000 worth of 8% bonds of Aguirre Co. for $398,642. The bonds were purchased to yield 10% interest. Interest is payable semi-annually, on July 1 and January 1. The bonds mature on January 1, 2025. Sarasota Company uses the effective interest method to amortize the discount or premium. On January 1, 2022, to meet its liquidity needs, Sarasota Company sold the bonds for $400,384, after receiving interest.
Prepare the journal entry to record the purchase of bonds on January 1. Assume that the bonds are classified as FV-OCI. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
Jan. 1 |
|||
eTextbook and Media
List of Accounts
Prepare the amortization schedule for the bonds. (Round answers to 0 decimal places, e.g. 5,275.)
| Schedule of Interest Revenue and Bond
Discount Amortization—Effective-Interest Method |
||||||||
| Date | Interest
Receivable Or Cash Received |
Interest Revenue |
Bond
Discount Amortization |
Carrying
Amount of Bonds |
||||
| 1/1/20 | $ | |||||||
| 7/1/20 | $ | $ | $ | |||||
| 12/31/20 | ||||||||
| 7/1/21 | ||||||||
| 12/31/21 | ||||||||
| 7/1/22 | ||||||||
| 12/31/22 | ||||||||
| 7/1/23 | ||||||||
| 12/31/23 | ||||||||
| 7/1/24 | ||||||||
| 12/31/24 | ||||||||
| Total | $ | $ | $ | |||||
eTextbook and Media
List of Accounts
Prepare the journal entries to record the semi-annual interest on July 1, 2020, and December 31, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
July 1 |
|||
|
Dec. 31 |
|||
eTextbook and Media
List of Accounts
Assuming the fair value of Aguirre bonds is $402,544 on December 31, 2021, prepare the necessary adjusting entry. (Assume that the fair value adjustment on December 31, 2020 was a debit of $3,645.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
Dec. 31 |
|||
eTextbook and Media
List of Accounts
Prepare the journal entry to record the sale of the bonds on January 1, 2022, including reclassifying holding gains or losses to net income. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
Jan. 1 |
|||
|
(To adjust to fair value at date of disposal) |
|||
|
Jan. 1 |
|||
|
(To record disposal) |
|||
|
Jan. 1 |
|||
|
(To reclassify holding loss) |
In: Accounting