Kim-Brooks, Inc. makes costumes for movies and television shows. Brooks Kimberly, the company's owner, prepared the following estimates for the upcoming year:

Required

(a)  

Assume that Kim-Brooks applies manufacturing overhead on the basis of direct labor hours. During the year, 49,800 direct labor hours were worked. How much overhead was applied to work in process? If actual manufacturing overhead for the year was $792,000, was overhead under- or over-applied during the year? By how much?

(b)  

Assume that Kim-Brooks applies manufacturing overhead on the basis of direct labor cost. During the year, $245,000 in direct labor cost was incurred. How much overhead was applied to work in process during the year? If actual manufacturing overhead for the year was $792,000, was overhead under- or over-applied during the year? By how much?

(c)  

Assume that Kim-Brooks applies manufacturing overhead on the basis of machine hours. During the year, 40,200 machine hours were worked. How much overhead was applied to work in process during the year? If actual manufacturing overhead for the year was $792,000, was overhead under- or over-applied during the year? By how much?

D4-20.  

Depreciation by Two Methods; Sale of Fixed Asset

New lithographic equipment, acquired at a cost of $625,000 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $53,700. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year.

On March 4 of Year 5, the equipment was sold for $91,500.

Required:

1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by the following methods:

a. Straight-line method

b. Double-declining-balance method

2. Journalize the entry to record the sale assuming that the manager chose the double declining-balance method. If an amount box does not require an entry, leave it blank.

3. Journalize the entry to record the sale in (2) assuming that the equipment was sold for $78,600 instead of $91,500. If an amount box does not require an entry, leave it blank.

Dividend

policies​)

Final earnings estimates for Chilean Health Spa​ & Fitness Center have been prepared for the CFO of the company and are shown in the following​ table:

. The firm has

7,300,000

shares of common stock outstanding. As assistant to the​ CFO, you are asked to determine the yearly dividend per share to be paid depending on the following possible​ policies:a. A stable dollar dividend targeted at

50

percent of earnings over a​ 5-year period.b. A​ small, regular dividend of

​$0.50

per share plus a​ year-end extra when the profits in any year exceed

​$19,000,000

The​ year-end extra dividend will equal

60

percent of profits exceeding

​$19,000,000

c. A constant dividend payout ratio of

45

percent.a. What is the yearly dividend per share to be paid depending on a stable dollar dividend targeted at

50

percent of earnings for years 1 through​ 5?

​$nothing

per share  ​(Round to the nearest​ cent.)b. Determine the yearly dividend per share to be paid depending on a​ small, regular dividend of

​$0.50

per share plus a​ year-end extra when the profits in any year exceed

​$19,000,000

The​ year-end extra dividend will equal

60

percent of profits exceeding

​$19,000,000

c. Determine the yearly dividend per share that will be paid assuming a constant dividend payout ratio of

45

ercent.

7/ In preparing a company's statement of cash flows for the most recent year using the indirect method, the following information is available:

Net cash provided by operating activities was:  

Multiple Choice

$46,000.

$71,600.

$22,000.

$126,000.

$32,000.

8/ Mercury Company reports depreciation expense of $41,000 for Year 2. Also, equipment costing $143,000 was sold for its book value in Year 2. There were no other equipment purchases or sales during the year. The following selected information is available for Mercury Company from its comparative balance sheet. Compute the cash received from the sale of the equipment.

Multiple Choice

$29,000.

$70,000.

$41,000.

$36,500.

$73,000.

9/ Bagwell's net income for the year ended December 31, Year 2 was $192,000. Information from Bagwell's comparative balance sheets is given below. Compute the cash paid for dividends during Year 2.

Multiple Choice

$106,700.

$146,400.

$85,300.

$50,700.

$95,700.

10/ Fernwood Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available:

The amount of cash paid for dividends was:

Multiple Choice

$52,500.

$54,100.

$61,400.

$44,600.

$63,000.

Final earnings estimates for the Smithfield Meat Packing Company have been prepared for the CFO of the company and are shown in the following​ table:

YEAR PROFITS AFTER TAXES 1 12,000,000 2 15,000,000 3 19,000,000 4 23,000,000 5 25,000,000

The firm has 4,000,000 shares of common stock outstanding. As assistant to the​ CFO, you are asked to determine the yearly dividend per share to be paid depending on the following possible​ policies:

a. A stable dollar dividend targeted at 30 percent of earnings over a​ 5-year period.

b. A​ small, regular dividend of $0.60 per share plus a​ year-end extra when the profits in any year exceed ​$18,000,000 The​ year-end extra dividend will equal 50 percent of profits exceeding ​$18,000,000

c. A constant dividend payout ratio of 40 percent.

a. What is the yearly dividend per share to be paid depending on a stable dollar dividend targeted at 30 percent of earnings for years 1 through​ 5?

​$nothing per share  ​(Round to the nearest​ cent.)

b. Determine the yearly dividend per share to be paid depending on a​ small, regular dividend of ​$0.60 per share plus a​ year-end extra when the profits in any year exceed ​$18,000,000.

The​ year-end extra dividend will equal 50 percent of profits exceeding $18,000,000.

c. Determine the yearly dividend per share that will be paid assuming a constant dividend payout ratio of

40 percent.

Using the following spot rates, what is the dollar price of a 3-year bond with a par value of $1000 that pays a fixed annual coupon of 6%?

Year 1: 4.5%

Year 2: 5.0%

Year 3: 6.0%

Which of the following bond would have the greatest price volatility?

A) 6%, 3-year bond

B) 6%, 10-year bond

C) 3%, 3-year bond

D) 9%, 10-year bond

Martin Towing Company is at the end of its accounting year ending December 31. The following data that must be considered were developed from the company's records and related documents:

1. On January 1 of the current year, the company purchased a new hauling van at a cash cost of $23,800. Depreciation estimated at $3,000 for the year has not been recorded for the current year.
2. During the current year, office supplies amounting to $890 were purchased for cash and debited in full to Supplies. At the end of last year, the count of supplies remaining on hand was $400. The inventory of supplies counted on hand at the end of the current year was $300.
3. On December 31 of the current year, Lanie's Garage completed repairs on one of the company's trucks at a cost of $1,080; the amount is not yet recorded by Martin and by agreement will be paid during January of next year.
4. On December 31 of the current year, property taxes on land owned during the current year were estimated at $1,340. The taxes have not been recorded and will be paid in the next year when billed.
5. On December 31 of the current year, the company completed towing service for an out-of-state company for $6,900 payable by the customer within 30 days. No cash has been collected, and no journal entry has been made for this transaction.
6. On July 1 of the current year, a three-year insurance premium on equipment in the amount of $660 was paid and debited in full to Prepaid Insurance on that date. Coverage began on July 1 of the current year.
7. On October 1 of the current year, the company borrowed $10,800 from the local bank on a one-year, 12 percent note payable. The principal plus interest is payable at the end of 12 months.
8. The income before any of the adjustments or income taxes was $40,000. The company's federal income tax rate is 30 percent. (Hint: Compute adjusted pre-tax income based on (a) through (g) to determine income tax expense.)

Required:

1. Indicate whether each transaction relates to a deferred revenue, deferred expense, accrued revenue, or accrued expense.

2. Prepare the adjusting entry required for each transaction at December 31 of the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to nearest whole dollar value)

XYZ Company completed the following transactions and events involving its delivery trucks.

Year 1

Year 2

Year 3

Required:
1-a. Calculate depreciation for Year 2.
1-b. Calculate book value and gain (loss) for sale of Truck on December 31, Year 3.
1-c. Prepare journal entries to record these transactions and events.

1A. Calculate depreciation for year 2.

1B. Calculate book value and gain (loss) for sale of truck on Dec. 31, year 3.

1C. Prepare journal entries to record these transactions and events.

Record the total cost of the new delivery truck, year-end adjusting entry for the depreciation expense of the delivery truck, year-end adjusting entry for the depreciation expense of the delivery truck, year-end adjusting entry for the depreciation expense of the delivery truck, and record the sale of the delivery truck for $5,500 cash.

Malco Enterprises issued $28,000 of common stock when the company was started. In addition, Malco borrowed $54,000 from a local bank on July 1, Year 1. The note had a 6 percent annual interest rate and a one-year term to maturity. Malco Enterprises recognized $92,300 of revenue on account in Year 1 and $103,200 of revenue on account in Year 2. Cash collections of accounts receivable were $79,300 in Year 1 and $89,500 in Year 2. Malco paid $55,200 of other operating expenses in Year 1 and $63,000 of other operating expenses in Year 2. Malco repaid the loan and interest at the maturity date. Required Based on this information given above, record the events in the accounting equation and answer the following questions. (Enter any decreases to account balances with a minus sign.)

a. What amount of interest expense would Malco report on the Year 1 income statement?

b. What amount of net cash flow from operating activities would Malco report on the Year 1 statement of cash flows?

c. What amount of total liabilities would Malco report on the December 31, Year 1, balance sheet?

d. What amount of retained earnings would Malco report on the December 31, Year 1, balance sheet?

e. What amount of net cash flow from financing activities would Malco report on the Year 1 statement of cash flows?

f. What amount of interest expense would Malco report on the Year 2 income statement?

g. What amount of net cash flow from operating activities would Malco report on the Year 2 statement of cash flows?

h. What amount of total assets would Malco report on the December 31, Year 2, balance sheet?

i. What amount of net cash flow from investing activities would Malco report on the Year 2 statement of cash flows?

j. If Malco Enterprises paid a $3,800 dividend during Year 2, what retained earnings balance would it report on the December 31, Year 2, balance sheet?