Company: Campbell Soup

What inventory costing method does the company use (LIFO/FIFO, etc) in 2018? Do you think it is appropriate?

What are the key raw materials in 2018?

Are there supply or price change risks associated with the raw materials?

On July 1, 2017, Sheridan Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,880,000. On July 1, Sheridan estimated that it would take between 2 and 3 years to complete the building. On December 31, 2019, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Gumbel for 2017, 2018, and 2019.

At
12/31/17
At
12/31/18
At
12/31/19
Contract costs incurred to date $298,000 $1,194,000 $2,098,500
Estimated costs to complete the contract 1,192,000 796,000 –0–
Billings to Gumbel 300,000 1,100,000 1,820,000

(a) Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2017, 2018, and 2019. (Ignore income taxes.) (If answer is 0, please enter 0. Do not leave any field blank.)

2017
[Entry field with correct answer]

Costs to date (12/31/17)
Estimated Total Costs
Percent Complete
Revenue Recognized
Profit / (Loss) Recognized in 2017
Estimated Costs to Complete
$
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Costs to date (12/31/17)
Revenue Recognized
Estimated Costs to Complete
Profit / (Loss) Recognized in 2017
Estimated Total Costs
Percent Complete
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[Entry field with correct answer]
    
    Revenue Recognized
    Percent Complete
    Profit / (Loss) Recognized in 2017
    Costs to date (12/31/17)
    Estimated Costs to Complete
    Estimated Total Costs
$
[Entry field with correct answer]

[Entry field with correct answer]

Profit / (Loss) Recognized in 2017
Percent Complete
Costs to date (12/31/17)
Estimated Total Costs
Estimated Costs to Complete
Revenue Recognized
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%

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Estimated Total Costs
Percent Complete
Revenue Recognized
Estimated Costs to Complete
Costs Incurred
Profit / (Loss) Recognized in 2017
$
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Estimated Costs to Complete
Revenue Recognized
Percent Complete
Costs Incurred
Profit / (Loss) Recognized in 2017
Estimated Total Costs
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Estimated Total Costs
Costs Incurred
Percent Complete
Profit / (Loss) Recognized in 2017
Estimated Costs to Complete
Revenue Recognized
$
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2018
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Estimated Total Costs
Total Profit/Loss
Contract Price
Costs to date (12/31/18)
Estimated Costs to Complete
Gross Profit Recognized in 2017
Profit / (Loss) Recognized in 2018
Profit/Loss Recognized in 2017
$
[Entry field with correct answer]
[Entry field with correct answer]

Gross Profit Recognized in 2017
Contract Price
Estimated Total Costs
Profit/Loss Recognized in 2017
Profit / (Loss) Recognized in 2018
Total Profit/Loss
Costs to date (12/31/18)
Estimated Costs to Complete
[Entry field with correct answer]
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    Profit/Loss Recognized in 2017
    Profit / (Loss) Recognized in 2018
    Estimated Total Costs
    Costs to date (12/31/18)
    Gross Profit Recognized in 2017
    Estimated Costs to Complete
    Contract Price
    Total Profit/Loss
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Profit / (Loss) Recognized in 2018    
Gross Profit Recognized in 2017    
Profit/Loss Recognized in 2017    
Costs to date (12/31/18)    
Estimated Costs to Complete    
Estimated Total Costs    
Contract Price    
Total Profit/Loss    
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Contract Price    
Total Profit/Loss    
Costs to date (12/31/18)    
Estimated Costs to Complete    
Profit/Loss Recognized in 2017    
Gross Profit Recognized in 2017    
Estimated Total Costs    
Profit / (Loss) Recognized in 2018    
$
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Total Profit/Loss
Costs to date (12/31/18)
Profit / (Loss) Recognized in 2018
Contract Price
Gross Profit Recognized in 2017
Estimated Costs to Complete
Estimated Total Costs
Profit/Loss Recognized in 2017
$
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Add
Less
:
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Estimated Total Costs
Contract Price
Estimated Costs to Complete
Total Profit/Loss
Profit/Loss Recognized in 2017
Profit / (Loss) Recognized in 2018
Gross Profit Recognized in 2017
Costs to date (12/31/18)
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Gross Profit Recognized in 2017
Estimated Total Costs
Total Profit/Loss
Contract Price
Estimated Costs to Complete
Profit/Loss Recognized in 2017
Profit / (Loss) Recognized in 2018
Costs to date (12/31/18)
$
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2019
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Contract Price
Costs to date (12/31/19)
Gross Profit Recognized in 2018
Total Profit/Loss
Profit/Loss Recognized in 2017
Profit/Loss Recognized in 2018
Gross Profit Recognized in 2017
Profit / (Loss) Recognized in 2019
Estimated Costs to Complete
Estimated Total Costs
$
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Gross Profit Recognized in 2018
Estimated Total Costs
Total Profit/Loss
Estimated Costs to Complete
Profit / (Loss) Recognized in 2019
Costs to date (12/31/19)
Profit/Loss Recognized in 2018
Gross Profit Recognized in 2017
Contract Price
Profit/Loss Recognized in 2017
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Total Profit/Loss
Profit / (Loss) Recognized in 2019
Profit/Loss Recognized in 2017
Costs to date (12/31/19)
Profit/Loss Recognized in 2018
Gross Profit Recognized in 2017
Estimated Costs to Complete
Estimated Total Costs
Gross Profit Recognized in 2018
Contract Price
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Costs to date (12/31/19)    
Contract Price    
Profit/Loss Recognized in 2017    
Profit/Loss Recognized in 2018    
Total Profit/Loss    
Gross Profit Recognized in 2018    
Profit / (Loss) Recognized in 2019    
Gross Profit Recognized in 2017    
Estimated Costs to Complete    
Estimated Total Costs    
$
[Entry field with incorrect answer]
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Contract Price
Total Profit/Loss
Profit/Loss Recognized in 2018
Gross Profit Recognized in 2017
Profit / (Loss) Recognized in 2019
Estimated Costs to Complete
Gross Profit Recognized in 2018
Costs to date (12/31/19)
Profit/Loss Recognized in 2017
Estimated Total Costs
$
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Add
Less
:
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Gross Profit Recognized in 2018
Gross Profit Recognized in 2017
Profit / (Loss) Recognized in 2019
Estimated Total Costs
Costs to date (12/31/19)
Profit/Loss Recognized in 2017
Profit/Loss Recognized in 2018
Contract Price
Total Profit/Loss
Estimated Costs to Complete
$
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Costs to date (12/31/19)
Estimated Total Costs
Profit/Loss Recognized in 2018
Profit / (Loss) Recognized in 2019
Estimated Costs to Complete
Contract Price
Total Profit/Loss
Gross Profit Recognized in 2017
Profit/Loss Recognized in 2017
Gross Profit Recognized in 2018
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Total Profit/Loss    
Contract Price    
Profit/Loss Recognized in 2017    
Estimated Total Costs    
Gross Profit Recognized in 2017    
Gross Profit Recognized in 2018    
Profit/Loss Recognized in 2018    
Profit / (Loss) Recognized in 2019    
Costs to date (12/31/19)    
Estimated Costs to Complete    
$
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(b) Using the completed-contract method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2017, 2018, and 2019. (Ignore income taxes.) (If answer is 0, please enter 0. Do not leave any fields blank.)

2018
[Entry field with incorrect answer]

Estimated Total Costs
Estimated Costs to Complete
Profit / (Loss) Recognized in 2018
Costs to date (12/31/18)
Contract Price
$
[Entry field with incorrect answer]
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Estimated Costs to Complete
Estimated Total Costs
Contract Price
Profit / (Loss) Recognized in 2018
Costs to date (12/31/18)
[Entry field with incorrect answer]
[Entry field with incorrect answer]
    
Estimated Costs to Complete    
Estimated Total Costs    
Contract Price    
Profit / (Loss) Recognized in 2018    
Costs to date (12/31/18)    
[Entry field with incorrect answer]
[Entry field with incorrect answer]
    
Estimated Total Costs    
Contract Price    
Costs to date (12/31/18)    
Estimated Costs to Complete    
Profit / (Loss) Recognized in 2018    
[Entry field with incorrect answer]
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Estimated Costs to Complete    
Costs to date (12/31/18)    
Contract Price    
Estimated Total Costs    
Profit / (Loss) Recognized in 2018    
$
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2019
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Costs Incurred
Contract Price
Profit / (Loss) Recognized in 2018
Total Profit / (Loss) on Contract
Profit / (Loss) Recognized in 2019
$
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Profit / (Loss) Recognized in 2018
Profit / (Loss) Recognized in 2019
Contract Price
Costs Incurred
Total Profit / (Loss) on Contract
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Total Profit / (Loss) on Contract    
Profit / (Loss) Recognized in 2019    
Profit / (Loss) Recognized in 2018    
Costs Incurred    
Contract Price    
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Less    
Add    
:
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Profit / (Loss) Recognized in 2019
Contract Price
Costs Incurred
Total Profit / (Loss) on Contract
Profit / (Loss) Recognized in 2018
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Costs Incurred    
Contract Price    
Profit / (Loss) Recognized in 2019    
Total Profit / (Loss) on Contract    
Profit / (Loss) Recognized in 2018    
$
[Entry field with incorrect answer now contains modified data]

No explanation needed.

Inc. makes and sells a single snowboard model, the Titan. Fullerton’s CEO expects to sell 3,910 snowboards at an estimated retail price of $1,320 per board during 2018. In the fall of 2017, Fullerton gathered the following data to prepare budgets for 2018:

​

CEO expects to sell 3,910 snowboards during 2018 at an estimated retail price of

$ 1,320 per board.​ Further, the CEO expects 2018 beginning inventory of 700 snowboards and would like to end 2018 with 900 snowboards in stock. The inventoriable unit cost for beginning finished goods inventory on January 1, 2018 ​is ​$230.00.

Data pertaining to the direct materials inventories are as follows:

Variable manufacturing overhead is $20 per direct labor-hour. There are also $28,770 in fixed manufacturing overhead cots budgeted for 2018. Both variable and fixed overhead costs are allocated based on direct manufacturing labor-hours.

Other data include the following:

Assume Fullerton uses a FIFO inventory method for both direct materials and finished goods. Ignore work in process in your calculations.

1.What are total finished good units to be produced?

Group of answer choices

4,110

3,710

4,700

3,900

2..What is total cost of direct materials to be used?

Group of answer choices

$3,714,250

$3,352,250

$4,217,500

$4,135,300

3.

What is total cost of direct materials to be purchased?

Group of answer choices

$3,352,550

$4,135,600

$4,218,100

$3,714,550

The information below for questions (a) and (b) Toyoda Inc. is a Japanese firm located in Tokyo. The firm collected JPY 190,000 from customers in 2018. Of the amount collected, JPY 40,000 was from revenue accrued from services performed in 2017, and JPY 20,000 was received in advance for 2019 revenue. Furthermore, the firm incurred JPY 78,000 of expenses in 2018, which will not be paid until 2019. The firm also incurred JPY 29,000 of expenses in 2018 which had been paid in 2017. The firm paid JPY 150,000 for expenses in 2018. Of the amount paid, JPY 50,000 was for expenses incurred on account in 2017, JPY 22,000 was paid in advance for 2019 expenses. The firm also earned JPY 60,000 of revenue in 2018, which will not be collected until 2019. The firm also earned JPY 25,000 of revenue in 2018 which had been collected in 2017.

(a) Compute 2018 Toyoda Inc.’s cash-basis net income! (2 points)

(b) Compute 2018 Toyoda Inc.’s accrual-basis net income! (3 points)

(c) Kishida-san is the CEO of Hyakuen Inc. He asks you, as the firm's accounting manager, regarding cash issues that he was confused. He was unsure whether cash equivalents are the same as cash. He was also unsure of how the restricted cash funds shall be reported on the balance sheet. Explain! (3 points)

(d) Herr Lahm is the CEO of Danke Mobile Inc. Danke Mobile Inc. is a German firm located in Munich. You were hired as the Danke Mobile Inc.'s accounting manager. You have just presented the GAAP of receivables. However, Herr Lahm could not understand why cash realizable value does not decrease when an uncollectible account is written off under the allowance method. You are required to explain this point to Herr Lahm! (2 points)

Baird Manufacturing Company was started on January 1, 2018, when it acquired $83,000 cash by issuing common stock. Baird immediately purchased office furniture and manufacturing equipment costing $9,100 and $35,900, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $3,900 salvage value and an expected useful life of four years. The company paid $11,500 for salaries of administrative personnel and $15,700 for wages to production personnel. Finally, the company paid $12,640 for raw materials that were used to make inventory. All inventory was started and completed during the year. Baird completed production on 4,600 units of product and sold 3,680 units at a price of $15 each in 2018. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.)

Required

1. Determine the total product cost and the average cost per unit of the inventory produced in 2018. (Round "Average cost per unit" to 2 decimal places.)

2. Determine the amount of cost of goods sold that would appear on the 2018 income statement. (Do not round intermediate calculations.)

3. Determine the amount of the ending inventory balance that would appear on the December 31, 2018, balance sheet. (Do not round intermediate calculations.)

4. Determine the amount of net income that would appear on the 2018 income statement. (Round your answer to the nearest dollar amount.)

5. Determine the amount of retained earnings that would appear on the December 31, 2018, balance sheet. (Round your answer to the nearest dollar amount.)

6. Determine the amount of total assets that would appear on the December 31, 2018, balance sheet. (Round your answer to the nearest dollar amount.)

On January 1, 2018, a machine was purchased for $100,000. The machine has an estimated salvage value of $6,400 and an estimated useful life of 5 years. The machine can operate for 104,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2018, 20,800 hrs; 2019, 26,000 hrs; 2020, 15,600 hrs; 2021, 31,200 hrs; and 2022, 10,400 hrs.

Compute the annual depreciation charges over the machine’s life assuming a December 31 year-end for each of the following depreciation methods. (Round answers to 0 decimal places, e.g. 45,892.)

On January 1, 2018, a machine was purchased for $100,000. The machine has an estimated salvage value of $6,400 and an estimated useful life of 5 years. The machine can operate for 104,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2018, 20,800 hrs; 2019, 26,000 hrs; 2020, 15,600 hrs; 2021, 31,200 hrs; and 2022, 10,400 hrs.

Compute the annual depreciation charges over the machine’s life assuming a December 31 year-end for each of the following depreciation methods. (Round answers to 0 decimal places, e.g. 45,892.)

Assume a fiscal year-end of September 30. Compute the annual depreciation charges over the asset’s life applying each of the following methods. (Round answers to 0 decimal places, e.g. 45,892.)

information for Ramirez Corp. is given below:

Ramirez Corp. Balance Sheet December 31, 2018

Ramirez Corp. Income Statement

Year Ended December 31, 2018

Additional information:

There are no preferred dividends in arrears, the balances in the Accounts Receivable and Inventory accounts are unchanged from January 1, 2018, and there were no changes in the Bonds Payable, Preferred Stock, or Common Stock accounts during 2018. Assume that preferred dividends for the current year have not been declared.

At December 31, 2018, the current ratio was

a. 2,250 / 630.

b. 6,675 / 819.

c. 4,689 / 819.

d. 4,689 / 1,044

The number of times interest was earned during 2018 was

a. 1,50 / 150.

b. 1,500 / 150.

c. 1,650 / 150.

d. 1,350 / 150.

At December 31, 2018, the book value per share of common stock was

a. $55.66.

b. $58.16.

c. $59.40.

d. $58.65.

The rate of return for 2018 based on the year-end common stockholders' equity was

a. 1,050 / 3,519.

b. 1,050 / 3,564.

c. 1,005 / 3,519.

d. 1,005 / 3,564.

Grichuk Power leased high-tech electronic equipment from Kolten Leasing on January 1, 2018. Kolten purchased the equipment from Wong Machines at a cost of $250,000, its fair value. (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.) Related Information: Lease term 2 years (8 quarterly periods) Quarterly lease payments $15,000 at Jan. 1, 2018, and at Mar. 31, June 30, Sept. 30, and Dec. 31 thereafter. Economic life of asset 5 years Interest rate charged by the lessor 8% Required: Prepare a lease amortization schedule and appropriate entries for Grichuk Power from the commencement of the lease through December 31, 2018. December 31 is the fiscal year end for each company. Appropriate adjusting entries are recorded at the end of each quarter.

Amort Schedule

General Journal

Prepare a lease amortization schedule for the term of the lease for Grichuk Power from the commencement of the lease through December 31, 2018. December 31 is the fiscal year end for each company. (Round your intermediate calculations to the nearest whole dollar amount. Enter all amounts as positive values.)

journal entries:

1 )Record the beginning of the lease for Grichuk Power.

2)Record the quarterly rental paid by Grichuk Power.

3)Record the quarterly rental and interest paid by Grichuk Power.

4 ) Record the amortization of Right-of-use equipment for Grichuk Power.

The TMI Corporation has been in operation for over 30 years and, at December 31, 2017, it had:

• 10,000 shares of $300 par-value common stock authorized, of which 4,000 shares had been issued, and

• 10,000 shares authorized, issued, and outstanding of $20 stated-value preferred stock, that pays a dividend of 4%.

On January 2, 2018, TMI’s Board of Directors declared and issued a 3-for-1 common stock split. Then, on September 1, 2018, TMI’s Board declared (i) a 20% (small) common stock dividend to holders of record on October 1, to be distributed on November 1, and (ii) the preferred stock dividend.

The company’s accounts also showed the following balances on August 31, 2018, before the declaration of the dividends: Additional contributed capital . . . . . . . . . . . . . . . . . . . . . . . . $ 90,000

Retained earnings (includes all net income earned through August 31) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600,000

When distributed in November, the stock dividend included 6,000 fractional share rights, representing 600 potential shares. On December 15, 90% of the rights were exercised; the remaining rights will not be exercised until 2019.

On December 20, 2018, TMI acquired 2,000 shares of its own common stock at the current market value.

On December 30, 2018, TMI established a $206,000 sinking fund, with an equivalent reserve in stockholders’ equity.

The company had additional net income of $114,000 for the period September 1 through December 31, 2018.

After the stock split, the market value of TMI’s common stock throughout 2018 was $96 per share. Using the information above, prepare a statement of stockholders’ equity of The TMI Corporation at December 31, 2018, providing full disclosure.

In order to provide the necessary disclosures in the statement of stockholders’ equity, it will be necessary to consider the information relating to the stock split and the stock dividend. However, do not provide any supporting journal entries for those transactions.

On January 1, 2018, Rick’s Pawn Shop leased a truck from Chumley Motors for a five-year period with an option to extend the lease for three years. Rick’s had no significant economic incentive as of the beginning of the lease to exercise the 3-year extension option. Annual lease payments are $15,500 due on December 31 of each year, calculated by the lessor using a 5% interest rate. The agreement is considered an operating lease. (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. Prepare Rick’s journal entry to record for the right-of-use asset and lease liability at January 1, 2018.
2. Prepare the journal entries to record interest and amortization at December 31, 2018.

• Required 1
• Required 2

Prepare Rick’s journal entry to record for the right-of-use asset and lease liability at January 1, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amount.)

Journal entry worksheet

• Record the beginning of the lease for Rick's.

Note: Enter debits before credits.

• Required 2

Prepare the journal entries to record interest and amortization at December 31, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amount.)

Journal entry worksheet

• Record the lease and interest payment for Rick's.

Note: Enter debits before credits.

• Record the amortization of right-to-use asset for Rick's.

Note: Enter debits before credits.