Turney Company produces and sells automobile batteries, the heavy-duty HD-240. The 2020 sales forecast is as follows.
|
Quarter |
HD-240 |
|
|---|---|---|
| 1 | 5,100 | |
| 2 | 7,320 | |
| 3 | 8,280 | |
| 4 | 10,430 |
The January 1, 2020, inventory of HD-240 is 2,040 units. Management
desires an ending inventory each quarter equal to 40% of the next
quarter’s sales. Sales in the first quarter of 2021 are expected to
be 25% higher than sales in the same quarter in 2020.
Prepare quarterly production budgets for each quarter and in total
for 2020.
| TURNEY
COMPANY Production Budget choose the accounting period For the Year Ending December 31, 2020For the Quarter Ended December 31, 2020For the Month Ended December 31, 2020 |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
|
Product HD-240 |
||||||||||
| Quarter | ||||||||||
|
1 |
2 |
3 |
4 |
|
||||||
| select an opening production budget
item
Direct Materials PurchasesExpected Unit SalesDirect Materials Per UnitBeginning Finished Goods UnitRequired Production UnitsTotal Materials RequiredTotal Required UnitsBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods Unit |
enter a number of units | enter a number of units | enter a number of units | enter a number of units | ||||||
| select between addition and deduction
AddLess : select a production budget itemDesired Ending Direct MaterialsTotal Required UnitsDirect Materials PurchasesRequired Production UnitsBeginning Direct MaterialsDesired Ending Finished Goods UnitTotal Materials RequiredBeginning Finished Goods UnitDirect Materials Per UnitExpected Unit Sales |
enter a number of units | enter a number of units | enter a number of units | enter a number of units | ||||||
| select a summarizing line for the
first part
Required Production UnitsDirect Materials Per UnitBeginning Direct MaterialsDirect Materials PurchasesDesired Ending Direct MaterialsDesired Ending Finished Goods UnitTotal Required UnitsBeginning Finished Goods UnitTotal Materials RequiredExpected Unit Sales |
enter a total number of units for the first part | enter a total number of units for the first part | enter a total number of units for the first part | enter a total number of units for the first part | ||||||
| select between addition and deduction
AddLess : select a production budget itemDirect Materials Per UnitTotal Required UnitsBeginning Finished Goods UnitBeginning Direct MaterialsDirect Materials PurchasesRequired Production UnitsDesired Ending Finished Goods UnitDesired Ending Direct MaterialsExpected Unit SalesTotal Materials Required |
enter a number of units | enter a number of units | enter a number of units | enter a number of units | ||||||
| select a closing production budget
item
Desired Ending Direct MaterialsBeginning Direct MaterialsDesired Ending Finished Goods UnitBeginning Finished Goods UnitDirect Materials PurchasesDirect Materials Per UnitExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units |
enter a total number of units | enter a total number of units | enter a total number of units | enter a total number of units | enter a total number of units | |||||
| Click if you would like to Show Work for this question: |
Open Show Work |
In: Accounting
Assume division 1 of the XYZ Company had the following results as of 12/31/2020: Management’s hurdle rate is 8%
|
Sales (CR) |
$5,000,000 |
|
Operating Income (CI) |
1,000,000 |
|
Total assets (CA) |
10,000,000 |
21. What is the division’s Return on Investment (ROI)?
22. What is the division’s margin?
23. What is the division’s turnover?
24. What is the division’s Residual Income (RI)?
In: Accounting
On December 21, 2020, you purchased 100 shares of ABC company at $11 per share. You plan to sell your shares on December 21, 2021 and are concerned about downside risk. A put option on ABC stock with an exercise price (K) of $40 is currently priced (P) at $2 per share. Also, two call options on ABC stock with exercise prices (K) of $40 and $65 are priced (C) at $2.5 and $1.50 per share, respectively. All options expire on December 21, 2021. What will be net profit/loss per share on a long collar (use K=$65 call) if the stock price is $0 per share? A. $28.5 B. $53.5 C. $58.5 D. $38.5
In: Finance
Problem 12-04
On July 31, 2020, Sunland Company paid $2,800,000 to acquire all
of the common stock of Conchita Incorporated, which became a
division (a reporting unit) of Sunland. Conchita reported the
following balance sheet at the time of the acquisition.
|
Current assets |
$720,000 |
Current liabilities |
$510,000 |
|||
|---|---|---|---|---|---|---|
|
Noncurrent assets |
2,500,000 |
Long-term liabilities |
410,000 |
|||
|
Total assets |
$3,220,000 |
Stockholders’ equity |
2,300,000 |
|||
|
Total liabilities and stockholders’ equity |
$3,220,000 |
It was determined at the date of the purchase that the fair value
of the identifiable net assets of Conchita was $2,550,000. Over the
next 6 months of operations, the newly purchased division
experienced operating losses. In addition, it now appears that it
will generate substantial losses for the foreseeable future. At
December 31, 2020, Conchita reports the following balance sheet
information.
| Current assets |
$400,000 |
||
| Noncurrent assets (including goodwill recognized in purchase) |
2,330,000 |
||
| Current liabilities |
(700,000 |
) |
|
| Long-term liabilities |
(500,000 |
) |
|
| Net assets |
$1,530,000 |
Finally, it is determined that the fair value of the Conchita
Division is $1,850,000.
Assume that fair value of the Conchita Division is $1,478,000
instead of $1,850,000. Determine the impairment loss, if any, to be
recorded on December 31, 2020. (If answer is zero, do
not leave answer field blank. Enter 0 for the
amount.)
| The impairment loss? |
Prepare the journal entry to record the impairment loss, if any,
and indicate where the loss would be reported in the income
statement. (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.)
|
Account Titles and Explanation |
Debit |
Credit |
|---|
In: Accounting
Teal Mountain Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to Sandhill Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement:
| 1. | Sandhill has the option to purchase the equipment for $25,000 upon termination of the lease. It is not reasonably certain that Sandhill will exercise this option. | |
| 2. | The equipment has a cost of $300,000 and fair value of $349,000 to Teal Mountain Leasing. The useful economic life is 2 years, with a residual value of $25,000. | |
| 3. | Teal Mountain Leasing desires to earn a return of 5% on its investment. | |
| 4. | Collectibility of the payments by Teal Mountain Leasing is probable. |
Click here to view factor tables.
Part 1
Prepare the journal entries on the books of Teal Mountain Leasing to reflect the payments received under the lease and to recognize income for the years 2020 and 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places e.g. 5,275.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
|---|---|---|---|---|
|
enter an account title for the journal entry on January 1 2020 |
enter a debit amount |
enter a credit amount |
|
|
enter an account title for the journal entry on January 1 2020 |
enter a debit amount |
enter a credit amount |
||
|
enter an account title for the journal entry on January 1 2020 |
enter a debit amount |
enter a credit amount |
||
|
enter an account title for the journal entry on January 1 2020 |
enter a debit amount |
enter a credit amount |
||
|
1/1/2012/31/2012/31/21 1/1/2012/31/2012/31/21 |
enter an account title |
enter a debit amount |
enter a credit amount |
|
|
enter an account title |
enter a debit amount |
enter a credit amount |
||
|
enter an account title |
enter a debit amount |
enter a credit amount |
||
|
1/1/2012/31/2012/31/21 1/1/2012/31/2012/31/21 |
enter an account title |
enter a debit amount |
enter a credit amount |
|
|
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
Part 2
Assuming that Sandhill exercises its option to purchase the equipment on December 31, 2021, prepare the journal entry to record the sale on Teal Mountain Leasing’s books. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
12/31/21 |
enter an account title for the journal entry on December 31 2021 |
enter a debit amount |
enter a credit amount |
|
enter an account title for the journal entry on December 31 2021 |
enter a debit amount |
enter a credit amount |
In: Accounting
E16.10 (LO 3) (Issuance and Exercise of Stock Options) On November 1, 2020, Columbo Company adopted a stock-option plan that granted options to key executives to purchase 30,000 shares of the company's $10 par value common stock. The options were granted on January 2, 2021, and were exercisable 2 years after the date of grant if the grantee was still an employee of the company. The options expired 6 years from date of grant. The option price was set at $40, and the fair value option-pricing model determines the total compensation expense to be $450,000.
All of the options were exercised during the year 2023: 20,000 on January 3 when the market price was $67, and 10,000 on May 1 when the market price was $77 a share.
In: Accounting
Rivera Company has several processing departments. Costs charged to the Assembly Department for November 2020 totaled $ 2,262,390 as follows.
| Work in process, November 1 | ||||
| Materials | $ 78,500 | |||
| Conversion costs | 48,000 | $ 126,500 | ||
| Materials added | 1,576,300 | |||
| Labor | 225,000 | |||
| Overhead | 334,590 |
Production records show that 34,500 units were in
beginning work in process 30% complete as to conversion
costs, 655,000 units were started into production,
and 24,000 units were in ending work in process 40%
complete as to conversion costs. Materials are entered at the
beginning of each process.
(a)
Correct answer iconYour answer is correct.
Determine the equivalent units of production and the unit production costs for the Assembly Department. (Round unit costs to 2 decimal places, e.g. 2.25.)
|
Materials |
Conversion Costs |
|||
| Equivalent Units | ||||
| Cost per unit |
$ |
$ |
Attempts: 1 of 7 used
(b)
Determine the assignment of costs to goods transferred out and in process.
|
Costs accounted for: |
||
|
Transferred out |
$ |
|
|
Work in process, November 30 |
||
|
Materials |
$ |
|
|
Conversion costs |
||
|
Total costs |
$ |
In: Accounting
Rivera Company has several processing departments. Costs charged
to the Assembly Department for November 2020 totaled $ 2,262,390 as
follows.
| Work in process, November 1 | ||||
| Materials | $ 78,500 | |||
| Conversion costs | 48,000 | $ 126,500 | ||
| Materials added | 1,576,300 | |||
| Labor | 225,000 | |||
| Overhead | 334,590 |
Production records show that 34,500 units were in
beginning work in process 30% complete as to conversion
costs, 655,000 units were started into production,
and 24,000 units were in ending work in process 40%
complete as to conversion costs. Materials are entered at the
beginning of each process.
Prepare a production cost report for the Assembly Department. (Round unit costs to 2 decimal places, e.g. 2.25 and other answers to 0 decimal places, e.g. 125.)
|
RIVERA COMPANY |
||||||||
|
Equivalent Units |
||||||||
|
Quantities |
Physical |
|
Conversion |
|||||
|
Units to be accounted for |
||||||||
|
Work in process, November 1 |
||||||||
|
Started into production |
||||||||
|
Total units |
||||||||
|
Units accounted for |
||||||||
|
Transferred out |
||||||||
|
Work in process, November 30 |
||||||||
|
Total units |
||||||||
|
|
|
Conversion |
|
|||||
|
Unit costs |
||||||||
|
Total Costs |
$ |
$ |
$ |
|||||
|
Equivalent units |
||||||||
|
Unit costs |
$ |
$ |
$ |
|||||
|
Costs to be accounted for |
||||||||
|
Work in process, November 1 |
$ |
|||||||
|
Started into production |
||||||||
|
Total costs |
$ |
|||||||
|
Cost Reconciliation Schedule |
||||||||
|
Costs accounted for |
||||||||
|
Transferred out |
$ |
|||||||
|
Work in process, November 30 |
||||||||
|
Materials |
$ |
|||||||
|
Conversion costs |
||||||||
|
Total costs |
$ |
|||||||
Attempts: 0 of 7 used
In: Accounting
Exercise 21-05
Morgan Leasing Company signs an agreement on January 1, 2020, to
lease equipment to Cole Company. The following information relates
to this agreement.
| 1. | The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6 years. | |
| 2. | The cost of the asset to the lessor is $245,000. The fair value of the asset at January 1, 2020, is $245,000. | |
| 3. | The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $24,335, none of which is guaranteed. | |
| 4. | The agreement requires equal annual rental payments, beginning on January 1, 2020. | |
| 5. | Collectibility of the lease payments by Morgan is probable. |
1.) Assuming the lessor desires a 8% rate of return on its investment, calculate the amount of the annual rental payment required
2.)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3.) Prepare all of the journal entries for the lessor for 2020 and 2021 to record the lease agreement, the receipt of lease payments, and the recognition of revenue. Assume the lessor’s annual accounting period ends on December 31, and it does not use reversing entries
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
|---|---|---|---|---|
|
enter an account title To record the lease on January 1 2017 | enter a debit amount | enter a credit amount | |
| enter an account title To record the lease on January 1 2017 | enter a debit amount | enter a credit amount | ||
| enter an account title To record the lease on January 1 2017 | enter a debit amount | enter a credit amount | ||
| enter an account title To record the lease on January 1 2017 | enter a debit amount | enter a credit amount | ||
|
(To record the lease) |
||||
|
1/1/2012/31/201/1/2112/31/21 |
enter an account title To record the receipt of lease payment on January 1 2017 | enter a debit amount | enter a credit amount | |
| enter an account title To record the receipt of lease payment on January 1 2017 | enter a debit amount | enter a credit amount | ||
|
(To record the receipt of lease payment) |
||||
|
1/1/2012/31/201/1/2112/31/21 |
enter an account title for the journal entry on December 31 2017 | enter a debit amount | enter a credit amount | |
| enter an account title for the journal entry on December 31 2017 | enter a debit amount | enter a credit amount | ||
|
1/1/2012/31/201/1/2112/31/21 |
enter an account title for the journal entry on January 1 2018 | enter a debit amount | enter a credit amount | |
| enter an account title for the journal entry on January 1 2018 | enter a debit amount | enter a credit amount | ||
|
1/1/2012/31/201/1/2112/31/21 |
enter an account title for the journal entry on December 31 2017 | enter a debit amount | enter a credit amount | |
| enter an account title for the journal entry on December 31 2017 | enter a debit amount | enter a credit amount |
In: Accounting
Below are purchases and sales for Hector retail company for the year 2020.
January 1 purchased 10 UNITS at $20 each
January 2 purchased 20 UNITS at $25 each
January 3 purchased 20 UNITS at $ 30 each
January 4 Sold 25 UNITS at $ 50 each
(A)
USING FIRST IN FIRST OUT METHOD (FIFO) DETERMINE THE FOLLOWING:
A,.COST OF GOOS SOLD
B. COST OF ENDING INVENTORY
C. GROSS PROFIT
(B)
USING LAST IN FIRST OUT METHOD (LIFO)
In: Accounting