On October 1, 2019, Santana Rey launched a computer services company called Business Solutions, which provides consulting services, computer system installations, and custom program development. Rey adopts the calendar year for reporting purposes and expects to prepare the company’s first set of financial statements on December 31, 2017. The company’s initial chart of accounts follows.
| Account | No. | Account | No. | |
| Cash | 101 | Common Stock | 307 | |
| Accounts Receivable | 106 | Dividends | 319 | |
| Computer Supplies | 126 | Computer Services Revenue | 403 | |
| Prepaid Insurance | 128 | Wages Expense | 623 | |
| Prepaid Rent | 131 | Advertising Expense | 655 | |
| Office Equipment | 163 | Mileage Expense | 676 | |
| Computer Equipment | 167 | Miscellaneous Expenses | 677 | |
| Accounts Payable | 201 | Repairs Expense—Computer | 684 | |
| Oct. | 1 | S. Rey invested $45,000 cash, a $20,000 computer system, and $8,000 of office equipment in the company in exchange for its common stock. | ||
| 2 | The company paid $3,300 cash for four months’ rent. (Hint: Debit Prepaid Rent for $3,300.) | |||
| 3 | The company purchased $1,420 of computer supplies on credit from Harris Office Products. | |||
| 5 | The company paid $2,220 cash for one year’s premium on a property and liability insurance policy. (Hint: Debit Prepaid Insurance for $2,220.) | |||
| 6 | The company billed Easy Leasing $4,800 for services performed in installing a new Web server. | |||
| 8 | The company paid $1,420 cash for the computer supplies purchased from Harris Office Products on October 3. | |||
| 10 | The company hired Lyn Addie as a part-time assistant for $125 per day, as needed. | |||
| 12 | The company billed Easy Leasing another $1,400 for services performed. | |||
| 15 | The company received $4,800 cash from Easy Leasing as partial payment on its account. | |||
| 17 | The company paid $805 cash to repair computer equipment that was damaged when moving it. | |||
| 20 | The company paid $1,728 cash for advertisements published in the local newspaper. | |||
| 22 | The company received $1,400 cash from Easy Leasing on its account. | |||
| 28 | The company billed IFM Company $5,208 for services performed. | |||
| 31 | The company paid $875 cash for Lyn Addie's wages for seven days' work. | |||
| 31 | The company paid $3,600 cash in dividends. | |||
| Nov. | 1 | The company reimbursed S. Rey in cash for business automobile mileage allowance (Rey logged 1,000 miles at $0.32 per mile). | ||
| 2 | The company received $4,633 cash from Liu Corporation for computer services performed. | |||
| 5 | The company purchased computer supplies for $1,125 cash from Harris Office Products. | |||
| 8 | The company billed Gomez Co. $5,668 for services performed. | |||
| 13 | The company received notification from Alex’s Engineering Co. that Business Solutions’s bid of $3,950 for an upcoming project was accepted. | |||
| 18 | The company received $2,208 cash from IFM Company as partial payment of the October 28 bill. | |||
| 22 | The company donated $250 cash to the United Way in the company's name. | |||
| 24 | The company completed work and sent a bill for $3,950 to Alex’s Engineering Co. | |||
| 25 | The company sent another bill to IFM Company for the past-due amount of $3,000. | |||
| 28 | The company reimbursed S. Rey in cash for business automobile mileage (1,200 miles at $0.32 per mile). | |||
| 30 | The company paid $1,750 cash for Lyn Addie's wages for 14 days' work. | |||
| 30 | The company paid $2,000 cash in dividends. |
Required:
1. Prepare journal entries in the General Journal to record each of the above transactions for Business Solutions. file:///D:/UAFS/Serial%20Problem%202%20Workpapers%20General%20Journal.pdf
2. Post the journal entries from requirement #1 to the General Ledger . file:///D:/UAFS/Serial%20Problem%202%20Workpapers%20General%20Ledger%20Trial%20Balance.pdf
3. Prepare a trial balance as of the end of
November on the worksheet labeled Trial Balance in #2
In: Accounting
Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $23.85 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on remote ranches that require considerable travel time. The owner’s daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below:
| Activity Cost Pool | Activity Measure | Activity for the Year | |
| Cleaning carpets | Square feet cleaned (00s) | 9,500 | hundred square feet |
| Travel to jobs | Miles driven | 235,500 | miles |
| Job support | Number of jobs | 1,600 | jobs |
| Other (organization-sustaining costs and idle capacity costs) | None | Not applicable | |
The total cost of operating the company for the year is $347,000 which includes the following costs:
| Wages | $ | 140,000 |
| Cleaning supplies | 34,000 | |
| Cleaning equipment depreciation | 7,000 | |
| Vehicle expenses | 28,000 | |
| Office expenses | 61,000 | |
| President’s compensation | 77,000 | |
| Total cost | $ | 347,000 |
Resource consumption is distributed across the activities as follows:
| Distribution of Resource Consumption Across Activities | ||||||||||
| Cleaning Carpets | Travel to Jobs | Job Support | Other | Total | ||||||
| Wages | 72 | % | 11 | % | 0 | % | 17 | % | 100 | % |
| Cleaning supplies | 100 | % | 0 | % | 0 | % | 0 | % | 100 | % |
| Cleaning equipment depreciation | 66 | % | 0 | % | 0 | % | 34 | % | 100 | % |
| Vehicle expenses | 0 | % | 81 | % | 0 | % | 19 | % | 100 | % |
| Office expenses | 0 | % | 0 | % | 65 | % | 35 | % | 100 | % |
| President’s compensation | 0 | % | 0 | % | 33 | % | 67 | % | 100 | % |
Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on.
Required:
1. Prepare the first-stage allocation of costs to the activity cost pools.
2. Compute the activity rates for the activity cost pools.
3. The company recently completed a 400 square foot carpet-cleaning job at the Flying N ranch—a 53-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system.
4. The revenue from the Flying N ranch was $95.40 (400 square feet @ $23.85 per hundred square feet). Calculate the customer margin earned on this job.
Complete this question by entering your answers in the tabs below.
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Compute the activity rates for the activity cost pools. (Round your answers to 2 decimal places.)
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The company recently completed a 400 square foot carpet-cleaning job at the Flying N ranch—a 53-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system. (Round your intermediate calculations and final answer to 2 decimal places.)
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The revenue from the Flying N ranch was $95.40 (4 hundred square feet @ $23.85 per hundred square feet). Calculate the customer margin earned on this job. (Round your intermediate calculations and final answers to 2 decimal places.)
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My wife and I used to live in a beautiful and remote agricultural area of West Virginia. Then a new interstate highway was built through the area (“Corridor H”). Use the idea of “bid functions” to explain how this highway is likely impacting the allocation of land between residential, agriculture, and forest in this area.
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This exercise is designed to be solved using technology such as
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In: Economics
This exercise is designed to be solved using technology such as
calculators or computer spreadsheets.
You borrow $18,000 with a term of four years at an APR of 8%. Make
an amortization table. How much equity have you built up halfway
through the term? (Round your answer to two decimal places.)
In: Math
This exercise is designed to be solved using technology such as
calculators or computer spreadsheets.
You borrow $18,000 with a term of four years at an APR of 8%. Make
an amortization table. How much equity have you built up halfway
through the term? (Round your answer to two decimal places.)
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Your task is to build a wastewater treatment plant to handle all of the domestic wastewater produced by a housing estate. Using population equivalent, PE = 65000, design, describe and calculate briefly the sizes of all the unit processes in the treatment plant that are going to be built. You may assume the value that is not given.
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Your task is to build a wastewater treatment plant to handle all of the domestic wastewater produced by a housing estate. Using population equivalent, PE = 65000, design, describe and calculate briefly the sizes of all the unit processes in the treatment plant that are going to be built. You may assume the value that is not given.
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