Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria’s owner has determined that the shop has two major cost drivers—the number of pizzas sold and the number of deliveries made.

The pizzeria’s cost formulas appear below:

In November, the pizzeria budgeted for 2,010 pizzas at an average selling price of $14 per pizza and for 210 deliveries.

Data concerning the pizzeria’s actual results in November were as follows:

Required:

1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November. (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.)

Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria’s owner has determined that the shop has two major cost drivers—the number of pizzas sold and the number of deliveries made.

The pizzeria’s cost formulas appear below:

In November, the pizzeria budgeted for 1,800 pizzas at an average selling price of $15 per pizza and for 220 deliveries.

Data concerning the pizzeria’s actual results in November appear below:

Required:

1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November. (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.)

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.

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, $18,100; cost of goods sold, $7,600; selling expenses, $1,440; general and administrative expenses, $940; interest revenue, $200; interest expense, $300. Income taxes have not yet been recorded. The company’s income tax rate is 25% on all items of income or loss. These revenue and expense items appear in the company’s income statement every year. The company’s controller, however, has asked for your help in determining the appropriate treatment of the following nonrecurring transactions that also occurred during 2021 ($ in thousands). All transactions are material in amount. Investments were sold during the year at a loss of $360. Schembri also had an unrealized gain of $500 for the year on investments in debt securities that qualify as components of comprehensive income. One of the company’s factories was closed during the year. Restructuring costs incurred were $1,700. 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 $700 in 2021 prior to the sale, and its assets were sold at a gain of $1,680. In 2021, the company’s accountant discovered that depreciation expense in 2020 for the office building was understated by $340. Negative foreign currency translation adjustment for the year totaled $400. 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 400,000 shares were issued on July 1, 2021. 2. Prepare a separate statement of comprehensive income for 2021.

The problem to be resolved:

Baltic Supplies Unadjusted Trial Balance as at December 31^st, 2018 is as follows:

Account Name Debit Credit

Cash 620,000

Accounts Receivable 410,000

Merchandise Inventory 480,000

Store supplies 144,800

Prepaid Insurance expense 840,000

Building and equipment 2,000,000

Accumulated depreciation-Building and equipment 976,000  

Accounts Payable 680,000

Traveling expense payable -   

unearned sales revenue    450,000   

Note payable-Long term 213,800

Baltic capital 1,700,000

Baltic withdrawal 35,000   

Sales revenue earned 2,550,500

sales discount 45,100

Sales returns allowance 62,500

Cost of Goods sold 401,000

Salaries expense 430,000

telephone expense 85,000

Depreciation expense- Building and equipment -

Insurance expense 630,000

store supplies expense 130,000

electricity expense 105,000   

Bad debt expense 65,400

Travelling expense 25,000

Interest expense 61,500

The following additional information was made available at December 31, 2018

1. Unearned sales revenue, still NOT earned at December 31, 2018 amounted $65,500.
2. The prepaid insurance of $840,000 was paid on July 1, 2018 for 8-months to February 2019.
3. The Building and Equipment has an estimated life of ten (10) years and is being depreciated on the double declining balance method of depreciation, down to a residual value of $10,000.
4. Accrued travelling expense amounted to $8,800 at December 31, 2018.
5. A physical count of inventory at December 31, 2018, reveals $485,000 worth of inventory on hand.

Required:

1. Prepare the necessary adjusting entries on December 31, 2018.

2. Prepare the company’s Multiple-step Income Statement for the year ended December 31, 2018.

3. Prepare the company’s Statement of Owner’s Equity for the year ended December 31, 2018.

4. Prepare the company’s classified Balance Sheet at December 31, 2018.

6.

Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31):

On July 1, 2021, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by GAAP. The assets of the component were sold on September 30, 2021, for $120,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows:

In addition to the account balances above, several events occurred during 2021 that have not yet been reflected in the above accounts:

1. A fire caused $68,000 in uninsured damages to the main office building. The fire was considered to be an unusual event.
2. Inventory that had cost $58,000 had become obsolete because a competitor introduced a better product. The inventory was written down to its scrap value of $5,000.
3. Income taxes have not yet been recorded.

Required:
Prepare a multiple-step income statement for the Reed Company for 2021, showing 2020 information in comparative format, including income taxes computed at 25% and EPS disclosures assuming 600,000 shares of outstanding common stock. (Amounts to be deducted should be indicated with a minus sign. Round EPS answers to 2 decimal places.)

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, $19,100; cost of goods sold, $8,100; selling expenses, $1,490; general and administrative expenses, $990; interest revenue, $250; interest expense, $220. Income taxes have not yet been recorded. The company’s income tax rate is 25% on all items of income or loss. These revenue and expense items appear in the company’s income statement every year. The company’s controller, however, has asked for your help in determining the appropriate treatment of the following nonrecurring transactions that also occurred during 2021 ($ in thousands). All transactions are material in amount. Investments were sold during the year at a loss of $410. Schembri also had an unrealized gain of $520 for the year on investments in debt securities that qualify as components of comprehensive income. One of the company’s factories was closed during the year. Restructuring costs incurred were $2,200. 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 $700 in 2021 prior to the sale, and its assets were sold at a gain of $1,700. In 2021, the company’s accountant discovered that depreciation expense in 2020 for the office building was understated by $390. Negative foreign currency translation adjustment for the year totaled $440.

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.

You are presented with the following data from The Home Depot (THD) on sales of its Snowminator Snow Shovel during the winters of 2012-2015, throughout Canada. The product’s price (P), measured in Canadian Dollars, is: 26, 22, 18, 14, 10, 6, and 2. The corresponding quantity demanded (Qd) in the Northern part of the nation, measured in millions of shovels, was: 3, 6, 9, 12, 15, 18, and 21. While the corresponding quantity demanded, measured in millions of shovels, in the Southern part of the nation was: 4, 6, 8, 10, 12, 14, and 16. Assume all the data was retrieved internally from The Home Depot. a. In two separate graphs that you have created using Excel, clearly and accurately graph the demand and total revenue curves for the Northern part of Canada. These will be graph # 1 and # 2, respectively. (36 pts; 18 pts per graph) b. In a separate graph from part A above, clearly and accurately graph the demand curve for the Southern part of Canada. This will be graph # 3. (10 pts) c. Solely consider your graphs and data in part A above. Following the demand curve from $26 to 22 to 18, etc., and all the way down to $2. Explain by referencing only the demand curve, total revenue curve, and the elasticity of demand, how a declining price can have three different impacts on total revenue. (10 pts) d. Consider your knowledge of the determinants of the elasticity of demand and consider the two demand curves you have in part A and B above. A visual inspection clearly indicates the curves are of differing slopes. Take one concrete cause and address why the demand curve in B has a different slope when compared to that of A. Explain why, do not simply re-state what is stated in the question already. (4 pts)

The following incomplete balance sheet for the Sanderson Manufacturing Company was prepared by the company’s controller. As accounting manager for Sanderson, you are attempting to reconstruct and revise the balance sheet.

Additional information ($ in 000s):

1. Certain records that included the account balances for the patent and shareholders’ equity items were lost. However, the controller told you that a complete, preliminary balance sheet prepared before the records were lost showed a debt to equity ratio of 1.2. That is, total liabilities are 120% of total shareholders’ equity. Retained earnings at the beginning of the year was $8,000. Net income for 2021 was $2,550 and $600 in cash dividends were declared and paid to shareholders.
2. Management intends to sell the investments in the next six months.
3. Interest on both the notes and the bonds is payable annually.
4. The notes payable are due in annual installments of $2,000 each.
5. Deferred revenue will be recognized as revenue equally over the next two fiscal years.
6. The common stock represents 700,000 shares of no par stock authorized, 450,000 shares issued and outstanding.
   

MC Qu. 132 On November 12, Higgins...

On November 12, Higgins, Inc., a U.S. Company, sold merchandise on credit to Kagome of Japan at a price of 1,670,000 yen. The exchange rate was $.00854 per yen on the date of sale. On December 31, when Higgins prepared its financial statements, the exchange rate was $.00860. Kagome paid in full on January 12, when the exchange rate was $.00878. On December 31, Higgins should prepare the following journal entry:

Multiple Choice

-Debit Foreign Exchange Loss $100; Accounts Receivable-Kagome $100.

-Debit Foreign Exchange Loss $100; credit Sales $100.

-Debit Sales $100; credit Foreign Exchange Gain $100.

-Debit Accounts Receivable-Kagome $100; credit Foreign Exchange Gain $100.

-No journal entry is required until the amount is collected.

MC Qu. 119 MotorCity, Inc. purchased...

MotorCity, Inc. purchased 59,000 shares of Shaw common stock for $270,000. This represents 40% of the outstanding stock. The entry to record the transaction includes a:

Multiple Choice

-Debit to Long-Term Investments for $4,968,000.

-Credit to Long-Term Investments for $4,968,000.

-Debit to Long-Term Investments for $270,000.

-Debit to Short-Term Investment-AFS for $270,000.

-Debit to Long-Term Investments-HTM for $270,000.

MC Qu. 123 Marjam Company owns...

Marjam Company owns 51,600 shares of MacKenzie Company's 120,000 outstanding shares of common stock. MacKenzie Company pays $120,000 in total cash dividends to its shareholders. Marjam's entry to record this transaction should include a:

Multiple Choice

-Debit to Interest Revenue for $14,190.

-Credit to Long-Term Investments for $33,000.

-Credit to Long-Term investments for $51,600.

-Credit to Dividend Revenue for $33,000.

-Debit to Dividend Revenue for $14,190.