Tangshang Industries production budget from the 2nd quarter of 2018, projected the following amounts of units to be produced:
April 1,000 units
May 1,200 units
June 1,250 units
Each unit requires 2 parts of component A and 3 parts of component B. Component A cost is $1.25 per unit and component B cost is $.80 per unit.
Each unit requires the following labor:
2 hours in the processing department
1 hour in the assembly department
Processing department labor rate is $4/hour
Assembly department labor rate is $6/hour
Variable Factory overhead is $.60 per unit
Fixed Factory overhead is $1,000 monthly
Using the information from the production budget of Tangshang Industries
1.Calculate total variable overhead cost for May 2018
2.Calculate total variable overhead cost for the quarter April - June 2018
3.Calculate total overhead cost for the quarter April - June 2018
4.Calculate total product cost for the quarter April - June 2018
In: Accounting
Tanner-UNF Corporation acquired as a long-term investment $260
million of 7.0% bonds, dated July 1, on July 1, 2018. Company
management has the positive intent and ability to hold the bonds
until maturity. The market interest rate (yield) was 9% for bonds
of similar risk and maturity. Tanner-UNF paid $230.0 million for
the bonds. The company will receive interest semiannually on June
30 and December 31. As a result of changing market conditions, the
fair value of the bonds at December 31, 2018, was $240.0
million.
Required:
1. & 2. Prepare the journal entry to record
Tanner-UNF’s investment in the bonds on July 1, 2018 and interest
on December 31, 2018, at the effective (market) rate.
3. At what amount will Tanner-UNF report its
investment in the December 31, 2018, balance sheet?
4. Suppose Moody’s bond rating agency downgraded
the risk rating of the bonds motivating Tanner-UNF to sell the
investment on January 2, 2019, for $220.0 million. Prepare the
journal entry to record the sale.
In: Accounting
|
Sales |
$600,000 |
|
Cost of goods sold |
($375,000) |
|
Rent |
($37,500) |
|
Salaries |
($37,500) |
|
Interest |
($7,500) |
|
Depreciation |
($22,500) |
|
Gain on sale of assets |
$7,500 |
|
Net income |
$127,500 |
The balance sheets as of December 31, 2017 and 2018 were:
|
Description |
2018 |
2017 |
||
|
Cash |
$112,500 |
$24,000 |
||
|
Accounts Receivable |
$45,000 |
$39,000 |
||
|
Inventory |
$60,000 |
$57,000 |
||
|
Prepaid rent |
$15,000 |
$18,000 |
||
|
Property, Plant & Equipment |
$300,000 |
$285,000 |
||
|
Less: Accumulated Depreciation |
($97,500) |
($82,500) |
||
|
Total Assets |
$435,000 |
$340,500 |
||
|
Accounts Payable |
$67,500 |
$60,000 |
||
|
Notes Payable |
$58,500 |
$51,000 |
||
|
Common Stock |
$187,500 |
$180,000 |
||
|
Retained Earnings |
$121,500 |
$49,500 |
||
|
Total Liabilities and Equity |
$435,000 |
$340,500 |
||
One machine included in Property, Plant & Equipment was sold on 1/1/2018. The original cost of the asset was $37,500.
Prepare a cash flow statement for the year ended December 31, 2018. Use the indirect approach for the operating cash flow section of the statement.
In: Accounting
Harris Company borrowed $60,000 on a two-year, 8% note dated October 1, 2016.Interest is payable annually on October 1, 2017, and October 1, 2018, the maturity date of the note.The company prepares its financial statements on a calendar year basis.Prepare all journal entries relating to the note for 2016, 2017, and 2018.
On January 1, 2017, Roma Company leased a tractor. The lease agreement qualifies as a capital lease and calls for payments of $10,000 per year (payable each year on January 1, starting in 2018) for eight years. The annual interest rate on the lease is 10%. Roma Company uses a calendar-year reporting period.
Prepare the journal entry for January 1, 2017, to record the leasing of the tractor:
Prepare the journal entry for December 31, 2017, to recognize the interest expense for the year 2017.
Prepare the journal entry to record the first lease payment.
Prepare the journal entry for December 31, 2018, to recognize the interest expense for the year 2018.
Prepare the journal entry to record the January 1, 2019 lease payment.
In: Accounting
Tuscany Statuary Company manufactures bust statues of famous historical
figures. All statues are the same size, and each statue requires the
same amount of resources. Tuscany employs a standard costing system
and has the following standards in order to produce one statue:
standard quantity standard price
direct materials 7 pounds $12 per pound
direct labor 5 hours $23 per hour
During 2018, Tuscany produced 7,000 statues using a total of 41,000
direct labor hours. Tuscany had no beginning inventories of any type
for 2018. During 2018, Tuscany purchased 59,000 pounds of direct
materials at a total cost of $784,700. At December 31, 2019, Tuscany
had 6,000 pounds of direct materials in its inventory. The total cost
of direct labor for Tuscany during 2018 was $861,000.
Calculate Tuscany's total direct labor variance for 2018. If the
variance is favorable, place a minus sign in front of your answer
(i.e., -5000). If the variance is unfavorable, simply enter your
answer as a number (i.e., 5000).In: Accounting
During 2018, Dana Company decided to begin investing its idle cash in marketable securities. The information contained below relates to Dana’s 2018 marketable security transactions: Apr. 1 Purchased $20,000 face value of Solomon Inc. 12% bonds at par plus accrued interest; interest on the bonds is payable each June 30 and December 31 June 30 Received the semiannual interest on the Solomon bonds. Nov. 1 Purchased $30,000 face value of Edwards Company 11% bonds at par plus accrued interest; interest on the bonds is payable each June 1 and December 1. Dec. 1 Received the interest on the Edwards bonds and sold the bonds for $30,300. Dec. 31 Received the interest on the Solomon bonds. At year-end, the market price of the Solomon bonds was $20,200. Required: 1. Record Dana’s investment transactions for 2018. 2. Show the items of income or loss on temporary investments Dana reports on its 2018 income statement. 3. Show the carrying value of Dana’s investment account on its December 31, 2018, balance sheet.
In: Accounting
Measuring Ability to Pay Liabilities
LeBronson's Companies Balance Sheet May 31, 2018 and 2017 LeBronson's companies has 10,000 common shares outstanding during 2018
| Assets | Liabilities | ||||
| 2018 | 2017 | 2018 | 2017 | ||
| Cash | 2,400 | 900.00 | Total Current Liabilties | 28,000 | 13,200 |
| Short-Term Investments | 28,000 | 9,000 | Long-Term Liabilities | 13,900 | 10,300 |
| Accounts Receivable | 7,500 | 5,200 | Total Liabilities | 41,900 | 23,500 |
| Merchandise Inventory | 6,900 | 8,600 | Stockholder's Equity | ||
| Other Current Assets | 8,000 | 1,500 | Common Stock | 11,000 | 11,000 |
| Total Current Assets | 52,800 | 25,200 | Retained Earnings | 29,900 | 19,700 |
| All Other Assets | 30,000 | 29,000 | Total Equity | 40,900 | 30,700 |
| Total Assets | 82,800 | 54,200 | Total Liabilities and Equity | 82,800 | 54,200 |
Calculating these objectives
A. Calculate the debt ratio and the debt to equity ratio at May 31, 2018, for LeBronson's Companies.
B. Is LeBronson's ability to pay its liabilities good or bad? Explain your decision or findings.
In: Accounting
Use the following information for the next four
questions:
| 2017 | 2018 | |
| Beginning Cash Balance | 20,000 | 50,000 |
| Net Income | 65,000.00 | 75,000.00 |
| Accounts Receivable | 10,000.00 | 6,000.00 |
| Prepaid Insurance | 5,000.00 | 3,500.00 |
| Inventory | 20,000.00 | 24,000.00 |
| Accounts Payable | 3,000.00 | 2,000.00 |
| Unearned Revenue | 5,000.00 | 7,000.00 |
| Depreciation Expense | 25,000.00 | 20,000.00 |
| Cash Paid for Dividends | 25,000.00 | 5,000.00 |
| Cash Payment to Repay Note Payable | - | 10,000.00 |
| Cash Payment to Purchase Land | 10,000.00 | - |
| Cash Received for Sale of Equipment | - | 15,000.00 |
| Cash Received for Issuance of Stock | - | 10,000.00 |
What is the cash flow from operating activities for 2018 (use negative number for cash outflow and positive number for net cash inflow)
What is the cash flow from investing activities for 2018 (use negative number for cash outflow and positive number for net cash inflow)
What is the cash flow from financing activities for 2018 (use negative number for cash outflow and positive number for net cash inflow)
What is the ending cash balance for 2018?
In: Accounting
The following is from
the 2018 annual report of Kaufman Chemicals, Inc.:
| Statements of Comprehensive Income | |||||||||||
| Years Ended December 31 | 2018 | 2017 | 2016 | ||||||||
| Net income | $ | 790 | $ | 620 | $ | 475 | |||||
| Other comprehensive income: | |||||||||||
| Change in net
unrealized gains on investments, net of tax of $12, ($10), and $10 in 2018, 2017, and 2016, respectively |
24 | (17 | ) | 18 | |||||||
| Other | (1 | ) | (1 | ) | 2 | ||||||
| Total comprehensive income | $ | 813 | $ | 602 | $ | 495 | |||||
Kaufman reports accumulated other comprehensive income in its
balance sheet as a component of shareholders' equity as
follows:
| ($ in millions) | ||||||
| 2018 | 2017 | |||||
| Shareholders’ equity: | ||||||
| Common stock | 300 | 300 | ||||
| Additional paid-in capital | 7,565 | 7,565 | ||||
| Retained earnings | 6,645 | 6,089 | ||||
| Accumulated other comprehensive income | 83 | 60 | ||||
| Total shareholders’ equity | $ | 14,593 | $ | 14,014 | ||
Required:
4. From the information provided, determine how
Kaufman calculated the $83 million accumulated other comprehensive
income in 2018. (Enter your answers in millions
(i.e., 10,000,000 should be entered as 10).)
In: Accounting
On June 30, 2018, Georgia-Atlantic, Inc., leased warehouse
equipment from Builders, Inc. The lease agreement calls for
Georgia-Atlantic to make semiannual lease payments of $463,866 over
a 4-year lease term, payable each June 30 and December 31, with the
first payment at June 30, 2018. Georgia-Atlantic's incremental
borrowing rate is 11.0%, the same rate Builders used to calculate
lease payment amounts. Builders manufactured the equipment at a
cost of $2.6 million. (FV of $1, PV of $1, FVA of $1, PVA of $1,
FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from
the tables provided.)
Required:
1. Determine the price at which Builders is
“selling” the equipment (present value of the lease payments) at
June 30, 2018.
2. What amounts related to the lease would
Builders report in its balance sheet at December 31, 2018 (ignore
taxes)?
3. What amounts related to the lease would
Builders report in its income statement for the year ended December
31, 2018 (ignore taxes)?
In: Accounting