In the Illustrative Case in this chapter, payroll transactions for Brookins Company were analyzed, journalized, and posted for the third quarter of the fiscal year. In this problem, you are to record the payroll transactions for the last quarter of the firm's fiscal year. The last quarter begins on April 1, 20--.

The following are the account balances forwarded as of April 1:
(1) Union Due Payable: $100
(2) Employees SIT Payable: $546.92
(3) FICA Taxes Payable - OASDI: $1,068.88
(4) FICA Taxes Payable - HI: $249.98
(5) Employees FIT Payable: $1,124.00
(6) FUTA Taxes Payable: $149.16
(7) SUTA Taxes Payable: $571.78
(8) Cash: $57,673.56
(9) Wages and Salaries: $71,360.00
(10) Payroll Taxes: $6,846.74

Note: The SUTA tax rate is 2.3%.

Analyze and journalize the transactions described in the narrative above. If an amount box does not require an entry, leave it blank. If required, round your answers to the nearest cent.

You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various retail outlets located in shopping malls across the country.  In the past, the company has done very little in the way of budgeting and at certain times of the year as experienced a shortage of cash.

Since you are well trained in budgeting, you have decided to prepare comprehensive budgets for the upcoming second quarter in order to show management the benefits that can be gained from an integrated budgeting program.  To this end, you have worked with accounting and other areas to gather the information assembled below.

The company sells many styles of earrings, but all are sold for the same price – $10 per pair.  Actual sales of earrings for the last three months and budgeted sales for the next six months are shown below (in pairs of earrings):

       January (actual)           20,000                 June (budget)              50,000

       February (actual)         26,000                 July (budget)               30,000

       March (actual)             40,000                 August (budget)          28,000

       April (budget)              65,000                 September (budget)    25,000

       May (budget)             100,000

The concentration of sales before and during May is due to Mother’s Day.  Sufficient inventory should be on hand at the end of each month to supply 40% of the earrings sold in the following month.

Suppliers are paid $4 for a pair of earrings.  One-half of a month’s purchases are paid for in the month of purchase and the other half is paid for in the following month.

All sales are on credit, with no discount, and payable within 15 days.  The company has found, however, that only 20% of a month’s sales are collected in the month of sale.  An additional 70% is collected in the following month, and the remaining 10% is collected in the second month following the sale.  Bad debts have been negligible.

(over)

Monthly operating expenses for the company are given below:

            Variable:

                 Sales commissions                         4% of sales

            Fixed:

                  Advertising                                   $200,000

                  Rent                                                $18,000

                  Salaries                                         $106,000

                  Utilities                                             $7,000

                  Depreciation                                   $14,000

       Additional information:

• Insurance is paid on an annual basis.  The cost is $3,000.  It is paid in November.
• The company plans to purchase $16,000 in new equipment during May and $40,000 in new equipment during June.  Both purchases will be for cash.
• The balance in accounts payable on March 31^st is $100,000.  This will be paid in April.
• The company declares dividends of $15,000 each quarter.  They are paid in the first month of the following quarter.
• The cash balance as of March 31^st is $74,000
• The number of units in ending inventory as of March 31^st is 26,000.
• The company maintains a minimum cash balance of $50,000.
• All borrowing is done at the beginning of a month and any repayments are made at the end of a month.
• The annual interest rate on borrowings is 12%.  Interest is compounded and paid at the end of each quarter on all loans outstanding during the quarter.

Required:

1. Prepare a master budget for the three-month period ending June 30.  Include the following detailed budgets:
   1. A sales budget, by month and in total.
   2. A schedule of expected cash collections from sales, by month and in total.
   3. A merchandise purchases budget in units and in dollars.  Show the budget by month and in total.
   4. A schedule of expected cash disbursements for merchandise purchases, by month and in total.
2. A cash budget.  Show the budget by month and in total.  Determine any borrowing that would be needed to maintain the minimum cash balance of $50,000.
3. Write an executive summary to the Controller of Earrings Unlimited commenting on the budgets you have prepared and making suggestions on some things that could be done to improve the company’s cash flow.

• In your own words, explain how to obtain the “expected value of perfect information” for any payoff table, which has probabilities associated with each state of nature.
• Then, provide an example, drawing from any of the payoff tables in Problems 1–19 at the end of Chapter 12.
• If no probabilities are given for the states of nature, then assume equal likelihood.

Problem 4. Brooke Bentley, a student in business administration, is trying to decide which management science course to take next quarter—I, II, or III. “Steamboat” Fulton, “Death” Ray, and “Sadistic” Scott are the three management science professors who teach the courses. Brooke does not know who will teach what course. Brooke can expect a different grade in each of the courses, depending on who teaches it next quarter, as shown in the following payoff table:

Determine the best course to take next quarter, using the following criteria.

1. Maximax

2. Maximin

Lewellen Products has projected the following sales for the coming year:

Sales Q1:$ 970, Q2: $ 1,050, Q3: $ 1,010, Q4: $ 1,110

Sales in the year following this one are projected to be 15 percent greater in each quarter.

a. Calculate payments to suppliers assuming that the company places orders during each quarter equal to 30 percent of projected sales for the next quarter. Assume that the company pays immediately. What is the payables period in this case?. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Payment of accounts Q1:$__, Q2: $__, Q3: $___, Q4: $___

b. Calculate payments to suppliers assuming a 90-day payables period. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Payment of accounts Q1:$__,Q2: $__, Q3:$__, Q4: $__

c. Calculate payments to suppliers assuming a 60-day payables period. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Payment of accounts Q1: $__, Q2:$__. Q3:$__, Q4:__

Submission Assignment 1

Assignment Details

Chicago Furniture Company produces combination desk and chair sets for the elementary schools in the Midwest. As the second quarter is progressing it is important for the controller to complete a budget for the third quarter. The sales department manager has provided the following forecast.

• In order to ensure Just-in-Time (JIT) deliveries are maintained in accordance with the needs of the schools Chicago Furniture Company has a standing policy that the inventory at the end of each month must be equal to 40% of the following month’s forecasted sales. On July 1st there will be 3,200 desk combos in inventory.
• The building of each desk combo requires 12 board feet of pine planks which cost $0.70 per foot. In order to maintain proper inventory for building the desk combos the department must have 30% of the next month’s production requirements.

Using Microsoft Excel, create a spreadsheet for the production and material purchases budget for the 3rd Quarter.

Chicago Furniture Company produces combination desk and chair sets for the elementary schools in the Midwest. As the second quarter is progressing it is important for the controller to complete a budget for the third quarter. The sales department manager has provided the following forecast.

• In order to ensure Just-in-Time (JIT) deliveries are maintained in accordance with the needs of the schools Chicago Furniture Company has a standing policy that the inventory at the end of each month must be equal to 40% of the following month’s forecasted sales. On July 1st there will be 3,200 desk combos in inventory.
• The building of each desk combo requires 12 board feet of pine planks which cost $0.70 per foot. In order to maintain proper inventory for building the desk combos the department must have 30% of the next month’s production requirements.

Using Microsoft Excel, create a spreadsheet for the production and material purchases budget for the 3rd Quarter.

On January 1, Year 1, a contractor agrees to build on the customer’s land a bridge that is expected to be completed at the end of Year 3. The bridge is a single performance obligation to be satisfied over time. The contractor determines that the progress toward completion of the bridge is reasonably measurable using the input method based on costs incurred. The contract price is $4,000,000, and initial expected total costs of the project are $2,400,000.

^ this is the question form the professor and I did the answers for year 1-2-3 :

Year 1
By the end of Year 1, 25% [$600,000 ÷ ($600,000 + $1,800,000)] of the total expected costs have been incurred. Using the input method based on costs incurred, the contractor recognizes 25% of the total expected revenue ($4,000,000 contract price × 25% ) = $1,000,000 and cost of goods sold $2,400,000.× 25%) = $600,000. The difference between these amounts is the gross profit for Year 1.

Revenue $1,000,000, Cost of goods sold $600,000 , Gross profit (1,000,000 – 600,000) =$400,000. The gross profit in Year 1 of $400,000 also may be calculated as total expected gross profit from the project of $1,600,000 ($4,000,000 - $2,400,000) times the progress toward completion of the contract of 25%.

Year 2
By the end of Year 2, total costs incurred are $1,800,000 ($600,000+ $1,200,000). Given that $1,200,000 is expected to be incurred in the future, the total expected cost is $3,000,000 ($1,800,000 + $1,200,000). The change in the total cost of the contract must be accounted for prospectively. By the end of Year 2, 60% ($1,800,000 ÷ $3,000,000) of expected costs have been incurred.
Thus, $2,400,000 ($4,000,000 × 60%) of cumulative revenue and $1,800,000 ($ 3,000,000 × 60%) of cumulative cost of goods sold should be recognized for Years 1 and 2.
Because $1,000,000 of revenue and $600,000 of cost of goods sold were recognized in Year 1, revenue of $1,400,000 ($2,400,000 cumulative revenue - $1,000,000) and cost of goods sold of $1,200,000 ($1,800,000 cumulative cost of goods sold - $600,000) are recognized in Year 2.
Revenue
$1,400,000
Cost of goods sold
1,200,000
Gross profit -- Year 2
$200,000*
* The gross profit in Year 2 of $200,000 also may be calculated as the cumulative gross profit for Years 1 and 2 of $600,000 [($4,000,000 - $3,000,000) × 60%] minus the gross profit recognized in Year 1 of $400,000.

Year 3
At the end of Year 3, the project is completed, and the total costs incurred for the contract are $2,900,000 ($600,000 + $1,200,000 + $1,100,000). Given $2,400,000 of cumulative revenue and $1,800,000 of cumulative cost of goods sold for Years 1 and 2, $1,600,000 ($4,000,000 contract price - $2,400,000) of revenue and $1,100,000 ($2,900,000 total costs - $1,800,000) of cost of goods sold are recognized in Year 3.

Revenue
$1,600,000
Cost of goods sold
1,100,000
Gross profit -- Year 3
$500,000
NOTE: (1) The total gross profit from the project of $550,000 ($400,000 + $200,000 + $500,000) equals the contract price of $4,000,000 minus the total costs incurred of $2,900,000. (2) When progress toward completion is measured using the cost-to-cost method, as in the example above, the cost of goods sold recognized for the period equals the costs incurred during that period.

NOW : I need the answer for this question:

An entity may not be able to estimate the degree of completion of a project at the end of the first year, perhaps because this is the first time such a project has been undertaken by the firm. In that case, how much revenue would the firm recognize in that year if significant costs have been incurred in the construction process?

Coronado, Inc. manufactures ergonomically designed computer furniture. Coronado uses a job order costing system. On November 30, the Work in Process Inventory consisted of the following jobs:

On November 30, Coronado’s Raw Materials Inventory account totaled $686,000, and its Finished Goods Inventory totaled $3,476,400. Coronado applies manufacturing overhead on the basis of machine hours. The company’s manufacturing overhead budget for the year totaled $4,500,000, and the company planned to use 900,000 machine hours during the year. Through the first eleven months of the year, the company used a total of 830,000 machine hours, total manufacturing overhead amounted to $4,274,500, and Cost of Goods Sold was $8,750,250. For the pursposes of this problem, ignore year-end disposition of over / under applied overhead.

Coronado purchased $638,000 in raw materials in December and incurred the following costs for jobs in process that month:

The following jobs were completed in December and transferred to the Finished Goods Inventory:

Bonita, Inc. manufactures ergonomically designed computer furniture. Bonita uses a job order costing system. On November 30, the Work in Process Inventory consisted of the following jobs:

On November 30, Bonita’s Raw Materials Inventory account totaled $676,000, and its Finished Goods Inventory totaled $3,456,400. Bonita applies manufacturing overhead on the basis of machine hours. The company’s manufacturing overhead budget for the year totaled $4,550,000, and the company planned to use 910,000 machine hours during the year. Through the first eleven months of the year, the company used a total of 840,000 machine hours, total manufacturing overhead amounted to $4,284,500, and Cost of Goods Sold was $8,760,250. For the pursposes of this problem, ignore year-end disposition of over / under applied overhead.

Bonita purchased $638,000 in raw materials in December and incurred the following costs for jobs in process that month:

The following jobs were completed in December and transferred to the Finished Goods Inventory:

1. In 2020, production of soya beans is 351 416 tons and in 2019, total production was 267 490 tons. The price of soya beans at beginning of 2020 was K4 400/ton and at beginning of 2019, price was K1 400/ton. Explain this scenario within context of demand and supply. What do you think will happen to price of soya beans in 2021 and why?
2. How is monetary policy used to stimulate economic activity? Use examples with respect to Zambia (not more than 2000 words).

3. 1.            The law of demand states that:

   a)            There is a direct or positive relationship between the price of a commodity and the quantity demanded.

   b)            The quantity demanded will be higher the lower is its price.

   c)            The quantity demanded will be lower the lower is its price.

   d)            The quantity demanded will be higher the higher is its price.

   2.            The law of supply states that:

   a)            There is a direct or positive relationship between the quantity supplied of a good or service and its price.

   b)            The higher the price of a good and service, the lower the amount supplied.

   c)            The lower the price of a good or service, the more quantity is supplied.

   d)            Supply is higher than demand at the equilibrium price.

   3.            The quantity demanded of Pepsi has decreased. The best explanation for this is that:

   a)            The price of Pepsi increased.

   b)            Pepsi consumers had an increase in income.

   c)            Pepsi's advertising is not as effective as in the past.

   d)            The price of Coca Cola has increased.

   4.            Market equilibrium exists when _____________ at the prevailing price.

   a)            quantity demanded is less than quantity supplied

   b)            quantity supplied is greater than quantity demanded

   c)            quantity demanded equals quantity supplied

   d)            quantity demanded is greater than quantity supplied

   5.            A movement along the demand curve to the left may be caused by:

   a)            A decrease in supply.

   b)            A rise in the price of inputs.

   c)            A fall in the number of substitute goods.

   d)            A rise in income.

   6.            Injections of money:

   a)            Decrease aggregate demand

   b)            Always equal savings

   c)            Always equal national income

   d)            Include investment and export spending

   7.            An increase in national income is:

   a)            Likely to increase exports

   b)            Likely to decrease savings

   c)            Likely to decrease investment

   d)            Likely to increase spending on imports

   8.            An increase in national income is likely to:

   a)            Decrease tax receipts

   b)            Worsen the trade position

   c)            Automatically cause an increase in government spending

   d)            Cause an increase in injections into the economy

   9.            A significant increase in the government budget deficit is likely to:

   a)            Reduce injections into the economy

   b)            Reduce national income

   c)            Move the economy away from full employment

   d)            Boost aggregate demand

   10.          If injections of money are greater than withdrawals:

   a)            National income is likely to increase

   b)            National income is likely to decrease

   c)            National income will stay in equilibrium

   d)            Prices will fall

   11.          In the circular flow of income model injections:

   a)            Are assumed to be exogeneous (independent of national income)

   b)            Are assumed to be a function of national income

   c)            Decrease aggregate demand

   d)            Decrease the investment into an economy

   12.          For equilibrium in an open four sector economy:

   a)            Actual injections = actual withdrawals

   b)            Planned injections = planned withdrawals

   c)            Savings = investment

   d)            Government spending = tax revenue

   13.          A reflationary (expansionist) policy:

   a)            Increases aggregate supply

   b)            Increases aggregate demand

   c)            Decreases the price level

   d)            Increases full employment

   14.          A reflationary policy could include:

   a)            decreasing injections

   b)            increasing taxation rates

   c)            increasing interest rates

   d)            increasing government spending

   15.          Which of the following is an injection into the economy?

   a)            Investment

   b)            Savings

   c)            Taxation

   d)            Import spending

   16.          Which of the following is a characteristic of a perfectly competitive market?

   a)            Firms are price setters.

   b)            There are few sellers in the market.

   c)            Firms can exit and enter the market freely.

   d)            All of these

   17.          Which of the following is NOT a feature of monopolistic competition?

   a)            Numerous sellers

   b)            Product differentiation

   c)            Numerous buyers

   d)            Homogenous products

   18.          In which form of market structure would price be the key factor when competing?

   a)            Monopoly

   b)            Oligopoly

   c)            Monopolistic Competition

   d)            Perfect Competition

   19.          When the market is run by a small number of firms that together control the majority of market share is known as

   a)            Oligopoly

   b)            Duopoly

   c)            Oligopsony

   d)            Perfect Competition

   20.          “Image building” objectives are common in _____ type of market structure?

   a)            Perfect Competition

   b)            Oligopoly

   c)            Monopsony

   d)            Monopoly