Blue Spruce Company’s trial balance at December 31, 2019, is presented below. All 2019 transactions have been recorded except for the items described following the trial balance.

Unrecorded transactions:

Prepare journal entries for the transactions listed above.

Multiple steps are requried for this question

Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below:

When preparing its planning budget the company estimated that it would serve 30 customers per month; however, during May the company actually served 35 customers.

Please answer the following letters towards the question

a. What amount of revenue would be included in Adger’s flexible budget for May?

b. What amount of employee salaries and wages would be included in Adger’s flexible budget for May?

c. What amount of travel expenses would be included in Adger’s flexible budget for May?

d. What amount of other expenses would be included in Adger’s flexible budget for May?

e. What net operating income would appear in Adger’s flexible budget for May?

f. What is Adger’s revenue variance for May? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

g. What is Adger’s employee salaries and wages spending variance for May? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

h. What is Adger’s travel expenses spending variance for May? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

i What is Adger’s other expenses spending variance for May? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

j.  What amount of revenue would be included in Adger’s planning budget for May?

k.  What amount of employee salaries and wages would be included in Adger’s planning budget for May?

l. What amount of travel expenses would be included in Adger’s planning budget for May?

m. What amount of other expenses would be included in Adger’s planning budget for May?

n. What activity variance would Adger report in May with respect to its revenue? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

o. What activity variances would Adger report with respect to each of its expenses for May? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Utilizing the CAFR obtained for City of Jackson in MS, review the governmental fund financial statements and related data and government-wide financial statements. Note particularly these items:

1. Statement of Activities at the Government-wide Level. What is the most costly governmental function or program operated by the government? Do any of the functions/programs have net revenue? How much of the cost of governmental activities was borne by taxpayers in the form of general revenues? Did the entity increase or decrease its governmental activities unrestricted net position this year? Did the entity increase or decrease its business-type activities unrestricted net position this year?
2. Statement of Revenues, Expenditures, and Changes in Fund Balances for Governmental Funds.
   1. Revenues. What system of classification of revenues is used in the governmental fund financial statements? List the three most important sources of General Fund revenues and the most important source of revenue for each major governmental fund. Does the reporting entity depend on any single source for as much as one-third of its General Fund revenues? What proportion of revenues is derived from property taxes? Do the notes clearly indicate recognition criteria for primary revenue sources?

Are charts, graphs, or tables included in the statistical section of the CAFR that show the changes over time in reliance on each revenue source? What have been the trends in revenue sources over time?

2. Expenditures. What level of classification of expenditures is used in the governmental fund financial statements (e.g., fund, function or program, organization unit, activity, character, object)? List the three largest categories of General Fund expenditures; list the largest category of expenditure of each major governmental fund.

Are charts, tables, or graphs presented in the statistical section of the CAFR to show the trend of General Fund expenditures, by category, for a period of 10 years? What has been the trend in expenditure categories? How does the trend in expenditures compare to the trend in revenues? Is expenditure data related to nonfinancial measures such as population of the government or workload statistics (e.g., tons of solid waste removed or number of miles of street constructed)?

2. 3. Other Financing Sources (Uses). Are other financing sources and uses reported in a separate section of the statement of revenues, expenditures, and changes in fund balances, below the revenues and expenditures sections? Do the line items indicate the nature of each financing source or use?
   4. Special or Extraordinary Items. Are any special or extraordinary items listed? What note disclosures are provided to help explain the items?
3. Budgetary Comparison Schedule or Statement. Does the government present budgetary comparisons as a basic governmental fund financial statement or as required supplementary information (RSI) immediately following the notes to the financial statements? Is the budgetary comparison title a schedule rather than a statement? Does the budgetary comparison present the original budget and the final amended budget? Does the budgetary schedule present actual data using the budgetary basis of accounting? Has the government presented one or more variance columns? Does the CAFR indicate that budgetary reporting practices differ from GAAP reporting practices? If so, does it explain how the practices differ?

1. In long-run monopolistic competition,

a) all firms will produce an identical product

b) entry or exit will shift the demand curve until all firms earn zero profit

c) firms might earn positive profits since strategic barriers prevent new firms from entering

d) entry or exit will shift the supply curve until all firms earn zero profit

e) firms may operate at a loss if the tax advantage are sufficiently large

2. What is the profit maximizing output level for a monopolistic competitive firm facing demand of P=50-2q, constant marginal costs of $10 and fixed costs are $50?

a) 19 units

b)10 units

c) 30 units

d) 25 units

e) 20 units

3. What is the profit maximizing price for a monopolistically competitive firm facing demand of P=50-2q, constant marginal costs of $10 and fixed costs of $50?

a) $50

b) $10

c) $2

d) $20

e) $30

4. What is the maximum profit that can be earned by a monopolistically competitive firm facing demand of P=50-2q, constant marginal costs of $10 and fixed costs of $50?

a) $150

b) $100

c) $500

d) $200

e) $300

5. How much deadweight loss will be created by a monopolistically competitive firm facing demand of P=50-2q, content marginal costs of $10 and fixed costs of $50?

a) $100

b) $300

c) $150

d) $50

e) $200

6. Which of the following is NOT true regarding perfect competition and monopolistic competition?

a) firms in each market structure operate in the long-run where LRAC and demand are tangent

b) there are no barriers to entry or exit in either type of competition

c) all of the answers are true

d) firms in each market structure operate at optimal scale

e) firms in each market structure earn zero profits in the long-run

7. Which characteristic of a monopolistically competitive market implies that firms will be unable to earn a profit in the long-run?

a) monopolistically competitive firms are able to earn a long-run profit

b) there are no barriers to entry

c) firms face a downward sloping demand curve

d) few sellers, many buyers

e) output is differentiated

8. In short-run monopolistic competition a firm maximizes its profit by selecting an output at which

a) marginal revenue exceeds marginal cost

b) marginal revenue equals marginal cost

c) total revenue equals total cost

d) marginal revenue equals average total cost

e) marginal revenue equals average variable cost

9. Which of the following is NOT true of a firm operating in a monopolistically competitive market in the long-run?

a) the firm produces less than optimal scale

b) the demand curve facing the firm is tangent to the marginal cost curve

c) the firm sets a price above the minimum average cost

d) the firm operates with excess capacity

e) all of the answers are true

The following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for the year ended December 31, 2021 ($ in thousands): sales revenue, $17,500; cost of goods sold, $7,300; selling expenses, $1,410; general and administrative expenses, $910; interest revenue, $160; interest expense, $290. Income taxes have not yet been recorded. The company’s income tax rate is 25% on all items of income or loss. These revenue and expense items appear in the company’s income statement every year. The company’s controller, however, has asked for your help in determining the appropriate treatment of the following nonrecurring transactions that also occurred during 2021 ($ in thousands). All transactions are material in amount.

1. Investments were sold during the year at a loss of $330. Schembri also had an unrealized gain of $400 for the year on investments in debt securities that qualify as components of comprehensive income.
2. One of the company’s factories was closed during the year. Restructuring costs incurred were $1,400.
3. During the year, Schembri completed the sale of one of its operating divisions that qualifies as a component of the entity according to GAAP. The division had incurred a loss from operations of $540 in 2021 prior to the sale, and its assets were sold at a gain of $1,600.
4. In 2021, the company’s accountant discovered that depreciation expense in 2020 for the office building was understated by $310.
5. Negative foreign currency translation adjustment for the year totaled $340.

Required:
1. Prepare Schembri’s single, continuous multiple-step statement of comprehensive income for 2021, including earnings per share disclosures. One million shares of common stock were outstanding at the beginning of the year and an additional 800,000 shares were issued on July 1, 2021.
2. Prepare a separate statement of comprehensive income for 2021.

Chapter 2
Critical Thinking Case 2 - Part 2
Brooke Stauffer Learns to Budget

Brooke Stauffer recently graduated from college and moved to Atlanta to take a job as a market research analyst. She was pleased to be financially independent and was sure that, with her $45,000 salary, she could cover her living expenses and have plenty of money left over to furnish her studio apartment and enjoy the wide variety of social and recreational activities available in Atlanta. She opened several department-store charge accounts and obtained a bank credit card.

For a while, Brooke managed pretty well on her monthly take-home pay of $2,893, but by the end of 2017, she was having trouble fully paying all her credit card charges each month. Concerned that her spending had gotten out of control and that she was barely making it from paycheck to paycheck, she decided to list her expenses for the past calendar year and develop a budget. She hoped not only to reduce her credit card debt but also to begin a regular savings program.

Brooke prepared the following summary of expenses for 2017.

After reviewing her 2017 expenses, Brooke made the following assumptions about her expenses for 2018:

All expenses will remain at the same levels, with these exceptions:

Auto insurance, auto expenses, gas and electricity, and groceries will increase 5 percent.

Clothing purchases will decrease to $2,250.

Phone and cable TV will increase $5 per month.

Furniture purchases will decrease to $660, most of which is for a new television.

He will take a one-week vacation to Colorado in July at a cost of $2,100.

All expenses will be budgeted in equal monthly installments except for the vacation and these items:

Auto insurance is paid in two installments due in June and December.

She plans to replace the brakes on her car in February at a cost of $220.

Visits to the dentist will be made in March and September.

She will eliminate her bank credit card balance by making extra monthly payments of $75 during each of the first six months.

Regarding her income, Brooke has just received a small raise, so her take-home pay will be $3,200 per month.

Make any necessary adjustments to Brooke’s estimated monthly expenses, and revise her annual cash budget for the year ending December 31, 2018, using Worksheet 2.3. Enter all expense amounts as positive values. Round your answers to nearest cent.

Analyze the budget and advise Brooke on her financial situation. Suggest some long-term, intermediate, and short-term financial goals for Brooke, and discuss some steps she can take to reach them.

Exceptional Electronics began operations September 1, 2019. The firm sells its merchandise for cash and on open account. Sales are subject to a 7 percent sales tax. During September, Exceptional Electronics engaged in the following transactions.

GENERAL LEDGER ACCOUNTS

ACCOUNTS RECEIVABLE LEDGER ACCOUNTS

Required:

Post the entries from the general journal into the appropriate accounts in the general ledger and in the accounts receivable ledger.

Prepare a schedule of accounts receivable.

Analyze:
What is the amount of sales tax owed at September 30, 2019?

General Ledgers

Schedule of AR

Analyze

Post the entries from the general journal into the appropriate accounts in the general ledger and in the accounts receivable ledger.

Complete this question by entering your answers in the tabs below.

General Ledgers

Schedule of AR

Analyze

Prepare a schedule of accounts receivable.

Complete this question by entering your answers in the tabs below.

General Ledgers

Schedule of AR

Analyze

What is the amount of sales tax owed at September 30, 2019?

Use the following information to solve for ROE. Your answer should be entered as a percent. For example 7.31% should be entered as 7.31. Include two decimals and a negative if appropriate

Current Assets are $98, net fixed assets are $115, total common equity is $178

Revenue is $194, total operating expenses are $63, depreciation expense is $32

Interest expense is $43 and taxes are $32