Zachary Company began operations on January 1, 2018, by issuing common stock for $37,000 cash. During 2018, Zachary received $56,200 cash from revenue and incurred costs that required $37,200 of cash payments.

Prepare a GAAP-based income statement and balance sheet for Zachary Company for 2018, under each of the following independent scenarios:

Zachary is a manufacturing company. The $37,200 was paid to purchase the following items:

(1) Paid $3,200 cash to purchase materials that were used to make products during the year.

(2) Paid $3,860 cash for wages of factory workers who made products during the year.

(3) Paid $8,940 cash for salaries of sales and administrative employees.

(4) Paid $21,200 cash to purchase manufacturing equipment. The equipment was used solely to make products. It had a four-year life and a $2,400 salvage value. The company uses straightline depreciation.

(5) During 2014, Lang started and completed 2,400 units of product. The revenue was earned when Lang sold 1,900 units of product to its customers.

5. John the plumber has the following weekly demand for repairs by his business: Q = 2,000 – 10(P) Q = quantity of repairs demanded by customers per week. P = average price per repair. John chooses the price to charge to his customers (cause). The result (effect) will be the total number of repairs his customers want per week.

A. Draw the demand curve faced by John the plumber. Numerically label its two end points. B. Create the table of numbers: P Q TR MR P = average price per repair. You may skip numbers for price changes by $10 at a time. TR = Total Revenue = PQ MR = Marginal Revenue = (change in TR)/(change in Q) Draw the MR curve on the diagram, as well/ C. The MC (Marginal Cost) to John per repair is $20. What price (P) will be charged per repair, and how many repairs (Q) per week? Show it on your diagram with solved numbers. D. Label the Consumer Surplus on your diagram. Define Consumer Surplus, as well.

Texas-Q Company produces and sells barbeque grills. Texas-Q sells three models: a small portable gas grill, a larger stationary gas grill, and the specialty smoker. In the coming year, Texas-Q expects to sell 15,900 portable grills, 53,000 stationary grills, and 5,300 smokers. Information on the three models is as follows:

Total fixed cost is $2,016,120.

Corporation wholesales peaches and oranges. Ms. Jasper is working with the company’s accountant to prepare next year’s budget. Ms. Jasper estimates that sales will increase 6 percent for peaches and 11 percent for oranges. The current year’s sales revenue data follow:

Based on the company’s past experience, cost of goods sold is usually 70 percent of sales revenue. Company policy is to keep 10 percent of the next period’s estimated cost of goods sold as the current period’s ending inventory.

Required

1. Prepare the company’s sales budget for the next year for each quarter by individual product.

2. If the selling and administrative expenses are estimated to be $660,000, prepare the company’s budgeted annual income statement.

3. Ms.Jasper estimates next year’s ending inventory will be $34,700 for peaches and $57,900 for oranges. Prepare the company’s inventory purchases budgets for the next year, showing quarterly figures by product.

Exercise 12-12 (Algo) Available-for-sale securities [LO12-1, 12-4]

Colah Company purchased $1,700,000 of Jackson, Inc., 5% bonds at par on July 1, 2021, with interest paid semi-annually. Colah determined that it should account for the bonds as an available-for-sale investment. At December 31, 2021, the Jackson bonds had a fair value of $1,970,000. Colah sold the Jackson bonds on July 1, 2022 for $1,530,000.

Required:
1. Prepare Colah’s journal entries for the following transactions:

1. The purchase of the Jackson bonds on July 1.
2. Interest revenue for the last half of 2021.
3. Any year-end 2021 adjusting entries.
4. Interest revenue for the first half of 2022.
5. Any entries necessary upon sale of the Jackson bonds on July 1, 2022, including updating the fair-value adjustment, recording any reclassification adjustment, and recording the sale.

2. Complete the following table to show the effect of the Jackson bonds on Colah’s net income, other comprehensive income, and comprehensive income for 2021, 2022, and cumulatively over 2021 and 2022.

2. [Macroeconomics: The Big Picture – Measuring Production, Income, and the Spending of Nations] Charles has a new small business that makes and sells amigurumi—crocheted stuffed animals. Charles already has crochet tools such as needles and a yarn ball winder, but needs to rent studio and retail space, as well as purchase project-specific supplies. These are his revenues and costs for his first week of operating.

Revenue = $5,000

Costs:

Rental Fee For Studio Space = $800

Rental Fee For Retail Space/Equipment = $1,000

Yarn = $900

Stuffing = $200

Wages = $1,200

a) Calculate the value added by this firm. (Hint: what are the intermediate goods?)

b) Show that value added equals capital income plus the labor income paid by the amigurumi firm. (Hint: what comprises capital income?)

c) Suppose that there is a sudden increased interest in amigurumi. This causes two things. First, the firm’s revenue rises from $5,000 to $6,500. Second, there is an increased demand for yarn. The firm must now pay $1000, instead of $900. Please repeat (a) and (b) with these new values.

prepare the financial statements of the Company:

A) Statement of Comprehensive Income

B) Statement of Financial Position

C) Statement of Changes in Owner's Equity

These financial statement items are for Snyder Corporation at year-end, July 31, 2017.

Instructions

Fill in the appropriate amounts to the questions in the answer box below. BE SURE TO SHOW YOUR CALCULATIONS otherwise there is no way to give you partial credit. BE SURE to label each of your answers so I can tell which part you are answering.

a. Total current assets

b. Total Property Plant and Equipment

c, Total Assets

d. Total Current Liabilities

e. Total Long Term Liabilities

f. Total Liabilities

g. Ending Retained Earnings

h. Total Stockholders Equity

i. Total Revenues

j. Total Expenses

k. Net Income

On December 31, 2018, Alan and Company prepared an income statement and balance sheet but failed to take into account four adjusting journal entries. The income statement, prepared on this incorrect basis, reported income before income tax of $31,000. The balance sheet (before the effect of income taxes) reflected total assets, $92,000; total liabilities, $41,000; and stockholders’ equity, $51,000. The data for the four adjusting journal entries follow:

1. Effect of Amortization of $8,200 for the year on software was not recorded.
2. Salaries and Wages amounting to $17,200 for the last three days of December 2018 were not paid and not recorded (the next payroll will be on January 10, 2019).
3. Rent revenue of $5,100 was collected on December 1, 2018, for office space for the three-month period December 1, 2018, to February 28, 2019. The $5,100 was credited in full to Deferred Revenue when collected.
4. Income taxes were not recorded and not paid. The income tax rate for the company is 20%.

Required:

Complete the following table to show the effects of the four adjusting journal entries. (Negative amounts should be indicated by a minus sign.)

Via Gelato is a popular neighborhood gelato shop. The company has provided the following cost formulas and actual results for the month of June:

While gelato is sold by the cone or cup, the shop measures its activity in terms of the total number of liters of gelato sold. For example, wages should be $7,400 plus $3.20 per liter of gelato sold and the actual wages for June were $28,400. Via Gelato expected to sell 6,400 liters in June, but actually sold 6,600 liters.

Required:

Calculate Via Gelato revenue and spending variances for June. (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.)