Problem 13-12
Pronghorn Music Emporium carries a wide variety of musical
instruments, sound reproduction equipment, recorded music, and
sheet music. Pronghorn uses two sales promotion
techniques—warranties and premiums—to attract customers.
Musical instruments and sound equipment are sold with a 1-year
warranty for replacement of parts and labor. The estimated warranty
cost, based on past experience, is 1% of sales.
The premium is offered on the recorded and sheet music. Customers
receive a coupon for each dollar spent on recorded music or sheet
music. Customers may exchange 200 coupons and $20 for an MP3
player. Pronghorn pays $33 for each player and estimates that 50%
of the coupons given to customers will be redeemed.
Pronghorn’s total sales for 2020 were $7,570,000—$5,898,000 from
musical instruments and sound reproduction equipment and $1,672,000
from recorded music and sheet music. Replacement parts and labor
for warranty work totaled $97,500 during 2020 ($45,000 of the work
is related to pre-2020 sales). A total of 6,340 players used in the
premium program were purchased during the year and there were
1,126,000 coupons redeemed in 2020.
The balances in the accounts related to warranties and premiums on
January 1, 2020, were as shown below.
| Premium Inventory | $ 37,950 | |
| Premium Liability | 47,620 | |
| Warranty Liability | 57,100 |
Pronghorn Music Emporium is preparing its financial statements for
the year ended December 31, 2020. Determine the amounts that will
be shown on the 2020 financial statements for the
following.
| (a) | Warranty Expense | $
|
||
| (b) | Warranty Liability | $ | ||
| (c) | Premium Expense | $ | ||
| (d) | Premium Inventory | $ | ||
| (e) | Premium Liability | $ |
In: Accounting
WildhorseCorporation is preparing earnings per share data for
2020. The net income for the year ended December 31, 2020 was
$410,000 and there were 59,700 common shares outstanding during the
entire year. Wildhorse has the following two convertible securities
outstanding:
| 10% convertible bonds (each $1,000 bond is convertible into 20 common shares) | $100,000 | |
| 3% convertible $100 par value preferred shares (each share is convertible into 2 common shares) | $53,000 |
Both convertible securities were issued at face value in 2017.
There were no conversions during 2020, and Wildhorse’s income tax
rate is 22%. The preferred shares are cumulative. For simplicity,
ignore the requirement to record the debt and equity components of
the bonds separately.
Calculate Wildhorse’s basic earnings per share for 2020.
(Round answer to 2 decimal places, e.g.
15.25.)
| Basic earnings per share | ||||||||||||||||
Recalculate Wildhorse’s basic and diluted earnings per share
for 2020, assuming instead that the preferred shares pay a 15%
dividend. Calculate the income effect of the dividends on preferred
shares.
|
In: Accounting
Bikes-R-Us Company
The company sponsors a defined benefit plan for its 200 employees. On January 1, 2020, the company’s actuary provided the following information:
Accumulated other comprehensive loss (PSC) $240,000
Pension plan assets (fair value and market-related asset value) 450,000
Accumulated benefit obligation $480,000
Projected benefit obligation $520,000
The average remaining service period for the participating employees is 6 years. All employees are expected to receive benefits under the plan. On December 31, 2020, the actuary calculated that the present value of future benefits earned for employee services rendered in the current year amounted to $62,000; the projected benefit obligation was $620,000; fair value of pension assets was $515,000; the accumulated benefit obligation amounted to $520,000. The expected return on plan assets and the discount dfevrate on the projected benefit obligation were both 6%. The actual return on plan assets is $15,000. The company’s current year’s contribution to the pension plan amounted to $50,000. No benefits were paid during the year.
(a) Determine the components of pension expense that the company would recognize in 2020. (With only one year involved,you need not prepare a worksheet.)
1(b) Prepare the journal entry to record the pension expense and the company’s funding of the pension plan in 2020.
(c) Compute the amount of the 2020 increase/decrease in gains or losses and the amount to be amortized in 2020 and 2021.
(d) Indicate the pension amounts reported in the financial statement as of December 31, 2020.
In: Accounting
Python 3
A simple way to encrypt a file is to change all characters following a certain encoding rule. In this question, you need to move all letters to next letter. e.g. 'a'->'b', 'b'->'c', ..., 'z'->'a', 'A'->'B', 'B'->'C', ..., 'Z'->'A'. For all digits, you need to also move them to the next number. e.g. '0'->'1', '1'->'2', ..., '9'->'0'. All the other symbols should not be changed.
--2020-10-16 19:32:31-- https://www.stats.govt.nz/assets/Uploads/Business-price-indexes/Business-price-indexes-June-2020-quarter/Download-data/business-price-indexes-june-2020-quarter-csv-corrected.csv Resolving www.stats.govt.nz (www.stats.govt.nz)... 45.60.11.104 Connecting to www.stats.govt.nz (www.stats.govt.nz)|45.60.11.104|:443... connected. HTTP request sent, awaiting response... 200 OK Length: 11924606 (11M) [text/csv] Saving to: ‘business-price-indexes-june-2020-quarter-csv-corrected.csv’ business-price-inde 100%[===================>] 11.37M 4.56MB/s in 2.5s 2020-10-16 19:32:34 (4.56 MB/s) - ‘business-price-indexes-june-2020-quarter-csv-corrected.csv’ saved [11924606/11924606]
In: Computer Science
Schultz Electronics manufactures two large-screen television models: the Royale which sells for $1,600, and a new model, the Majestic, which sells for $1,300. The production cost computed per unit under traditional costing for each model in 2020 was as follows.
Assign overhead to products using ABC and evaluate decision.
|
Traditional Costing |
Royale |
Majestic |
|
Direct materials |
$ 700 |
$420 |
|
Direct labor ($20 per hour) |
120 |
100 |
|
Manufacturing overhead ($38 per DLH) |
228 |
190 |
|
Total per unit cost |
$1,048 |
$710 |
In 2020, Schultz manufactured 25,000 units of the Royale and 10,000 units of the Majestic. The overhead rate of $38 per direct labor hour was determined by dividing total expected manufacturing overhead of $7,600,000 by the total direct labor hours (200,000) for the two models.
Under traditional costing, the gross profit on the models was Royale $552 or ($1,600 − $1,048), and Majestic $590 or ($1,300 − $710). Because of this difference, management is considering phasing out the Royale model and increasing the production of the Majestic model.
Before finalizing its decision, management asks Schultz’s controller to prepare an analysis using activity-based costing (ABC). The controller accumulates the following information about overhead for the year ended December 31, 2020.
|
Activities |
Cost Drivers |
Estimated Overhead |
Expected Use of Cost Drivers |
Activity-Based Overhead Rate |
|
Purchasing |
Number of orders |
$1,200,000 |
40,000 |
$30/order |
|
Machine setups |
Number of setups |
900,000 |
18,000 |
$50/setup |
|
Machining |
Machine hours |
4,800,000 |
120,000 |
$40/hour |
|
Quality control |
Number of inspections |
700,000 |
28,000 |
$25/inspection |
The cost drivers used for each product were:
|
Cost Drivers |
Royale |
Majestic |
Total |
|
Purchase orders |
17,000 |
23,000 |
40,000 |
|
Machine setups |
5,000 |
13,000 |
18,000 |
|
Machine hours |
75,000 |
45,000 |
120,000 |
|
Inspections |
11,000 |
17,000 |
28,000 |
Instructions Please use an Excel spreadsheet for your answers, clearly marking the answers to each requirement (a) – (c)
a. Assign the total 2020 manufacturing overhead costs to the two products using activity-based costing (ABC) and determine the overhead cost per unit.
b. What was the cost per unit and gross profit of each model using ABC?
c. Are management’s future plans for the two models sound? Explain.
In: Accounting
|
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In: Accounting
Problem 23-08
Comparative balance sheet accounts of Oriole Company are presented below.
|
ORIOLE COMPANY |
||||
|
Debit Balances |
2020 |
2019 |
||
| Cash |
$70,700 |
$50,900 |
||
| Accounts Receivable |
154,500 |
131,300 |
||
| Inventory |
75,000 |
61,600 |
||
| Debt investments (available-for-sale) |
55,200 |
84,600 |
||
| Equipment |
69,700 |
47,600 |
||
| Buildings |
144,200 |
144,200 |
||
| Land |
39,800 |
24,800 |
||
| Totals |
$609,100 |
$545,000 |
||
|
Credit Balances |
||||
| Allowance for Doubtful Accounts |
$9,900 |
$8,000 |
||
| Accumulated Depreciation—Equipment |
20,800 |
13,800 |
||
| Accumulated Depreciation—Buildings |
37,300 |
28,100 |
||
| Accounts Payable |
66,700 |
59,700 |
||
| Income Taxes Payable |
11,900 |
9,900 |
||
| Long-Term Notes Payable |
62,000 |
70,000 |
||
| Common Stock |
310,000 |
260,000 |
||
| Retained Earnings |
90,500 |
95,500 |
||
| Totals |
$609,100 |
$545,000 |
||
Additional data:
| 1. | Equipment that cost $9,900 and was 60% depreciated was sold in 2020. | |
| 2. | Cash dividends were declared and paid during the year. | |
| 3. | Common stock was issued in exchange for land. | |
| 4. | Investments that cost $34,600 were sold during the year. | |
| 5. | There were no write-offs of uncollectible accounts during the year. |
Oriole’s 2020 income statement is as follows.
| Sales revenue |
$951,100 |
||||
| Less: Cost of goods sold |
603,200 |
||||
| Gross profit |
347,900 |
||||
| Less: Operating expenses (includes depreciation expense and bad debt expense) |
249,700 |
||||
| Income from operations |
98,200 |
||||
| Other revenues and expenses | |||||
| Gain on sale of investments |
$15,000 |
||||
| Loss on sale of equipment |
(3,100 |
) |
11,900 |
||
| Income before taxes |
110,100 |
||||
| Income taxes |
45,300 |
||||
| Net income |
$64,800 |
(a) Compute net cash provided by operating
activities under the direct method. (Enter negative
amounts using either a negative sign preceding the number e.g. -45
or parentheses e.g. (45).)
| Net cash flow from operating activities | $ |
(b) Prepare a statement of cash flows using the
indirect method.
In: Accounting
Jan 1, 2020 - Issue 1,000 - $1,000 5-year 10% bonds, to yield 8%; Interest is paid semi-annually on June 30th and Dec 31st. (Round all numbers to nearest dollar throughout).
1.Calculate the PV of the bond obligation.
2.Make the original JE for issuance on Jan 1, 2020
3.Prepare the first four lines of the amortization table
4.Make the JEs for June 30 and Dec 31 of 2020.
In: Finance
Omega Coffee Shop enters into a contract with Software Wizards
Co. on May 15, 2020, to deliver 100 bags of ground coffee beans to
Software on June 1. Software agrees to pay $1,000 for the coffee
beans, which cost Omega $6 each. Omega delivers the bags of coffee
beans on June 1, 2020, and receives payment from Software on June
20, 2020.
Prepare the journal entries for Omega Coffee Shop related to this
contract.
In: Accounting
Goose Corporation, a C corporation, incurs a net capital loss of $12,000 for 2020. It also has ordinary income of $10,000 in 2020. Goose had net capital gains of $2,500 in 2016 and $5,000 in 2019.
Answer the following:
a. Determine the amount, if any, of the net capital loss of $12,000 that is deductible in 2020.
b. Determine the amount, if any, of the net capital loss of $12,000 that is carried forward to 2021.
Please show all calculations and explain. Thank you.
In: Accounting