Exercise 6-1

Umatilla Bank and Trust is considering giving Blossom Company a loan. Before doing so, it decides that further discussions with Blossom Company’s accountant may be desirable. One area of particular concern is the Inventory account, which has a year-end balance of $250,820. Discussions with the accountant reveal the following. 1. Blossom Company sold goods costing $54,230 to Hemlock Company FOB shipping point on December 28. The goods are not expected to reach Hemlock until January 12. The goods were not included in the physical inventory because they were not in the warehouse. 2. The physical count of the inventory did not include goods costing $91,590 that were shipped to Blossom Company FOB destination on December 27 and were still in transit at year-end. 3. Blossom Company received goods costing $24,420 on January 2. The goods were shipped FOB shipping point on December 26 by Yanice Co. The goods were not included in the physical count. 4. Blossom Company sold goods costing $56,030 to Ehler of Canada FOB destination on December 30. The goods were received in Canada on January 8. They were not included in Blossom Company physical inventory. 5. Blossom Company received goods costing $39,190 on January 2 that were shipped FOB destination on December 29. The shipment was a rush order that was supposed to arrive December 31. This purchase was included in the ending inventory of $250,820. Determine the correct inventory amount on December 31. The correct inventory amount on December 31 $Enter a dollar amount

CircuitTown commenced a gift card program in January 2021 and sold $11,900 of gift cards in January, $19,450 in February, and $20,850 in March 2021 before discontinuing further gift card sales. During 2021, gift card redemptions were $8,100 for the January gift cards sold, $4,600 for the February cards, and $6,100 for the March cards. CircuitTown considers gift cards to be “broken” (not redeemable) 10 months after sale.

Required:
1. How much revenue will CircuitTown recognize with respect to January gift card sales during 2021?
2. Prepare journal entries to record the sale of January gift cards, the redemption of gift cards (ignore sales tax), and breakage (expiration) of gift cards.
3. How much revenue will CircuitTown recognize with respect to March gift card sales during 2021?
4. What liability for deferred revenue associated with gift card sales would CircuitTown show as of December 31, 2021?

How much revenue will CircuitTown recognize with respect to January gift card and March gift card sales during 2021? What liability for deferred revenue associated with gift card sales would CircuitTown show as of December 31, 2021?

The following comparative income statement (in thousands of dollars) for two recent fiscal years was adapted from the annual report of Speedway Motorsports, Inc., owner and operator of several major motor speedways, such as the Atlanta, Texas, and Las Vegas Motor Speedways.

a. Prepare a comparative income statement for these two years in vertical form, stating each item as a percent of revenues. Enter all amounts as positive numbers. (Note: Due to rounding, amounts may not total 100%).

b. Overall revenue __________ some between the two years, accompanied by a slight change in the overall mix of revenue sources. The NASCAR broadcasting revenue _________ by 1.3% of total revenue, while event-related revenue _____________ by 1.2% of total revenue. NASCAR event management fees, ___________ by 0.7% of total revenue. General and administrative expenses, however, _____________ by over 2.9% of total revenue. It appears that _____________ has helped the company significantly improve its income from continuing operations.

Fantastic Styling Salon is run by three​ stylists, Jenny​ Perez, Jill​ Sloan, and Jerry​ Tiller, each capable of serving five customers per​ hour, on average. Use POM for Windows or OM Explorer to answer the following questions:

Note: During busy periods of the​ day, when nine customers on average arrive per​ hour, all three stylists are on staff.

a. If all customers wait in a common line for the next available​ stylist, how long would a customer wait in​ line, on​ average, before being​ served?

b. Suppose that each customer wants to be served by a specific​ stylist, 1/3 want​ Perez, 1/3 want​ Sloan, 1/3 want Tiller. How long would a customer wait in​ line, on​ average, before being​ served?

c. If all customers wait in a common line for the next available​ stylist, how long would a customer wait in​ line, on​ average, before being​ served?

d. Suppose that each customer wants to be served by a specific​ stylist, 60​% want Perez and 40​% want Sloan. How long would a customer wait in​ line, on​ average, before being served by​ Perez? By​ Sloan? Overall?

I would really appreciate it if all work is shown! Thank you for your time.

Fantastic Styling Salon is run by three stylists, Jenny​ Perez, Jill​ Sloan, and Jerry​ Tiller, each capable of serving five customers per​ hour, on average. Use POM for Windows or OM Explorer to answer the following questions:

Note: During busy periods of the​ day, when nine customers on average arrive per​ hour, all three stylists are on staff.

a. If all customers wait in a common line for the next available​ stylist, how long would a customer wait in​ line, on ​average, before being​ served?

b. Suppose that each customer wants to be served by a specific​stylist, 1/3 want​ Perez, 1/3 want​ Sloan, 1/3 want Tiller. How long would a customer wait in​ line, on​ average, before being​served?

c. If all customers wait in a common line for the next available​ stylist, how long would a customer wait in​ line, on​average, before being​ served?

d. Suppose that each customer wants to be served by a specific​stylist, 60​% want Perez and 40​% want Sloan. How long would a customer wait in​ line, on​ average, before being served by​ Perez? By​ Sloan? Overall?

I would really appreciate it if all work is shown! Thank you for your time.

RunAway is a local company that​ custom-prints tech running shirts for organized racing events. The company has been in business for 2 years. Normal demand for the tech running shirts is approximately 650 shirts per event. On​ average, there are two events per month. The company has the following direct costs per​shirt: Direct material (tech shirts) $5.00 Direct labor (printing) $0.60 Direct labor (design) $2.70 Total direct costs $8.30. The company has historically estimated selling price based on the direct cost of providing the tech shirts. Prices reflected a 30% desired profit margin above direct costs.​ Recently, RunAway has experienced​ lower-than-normal profits and suspects that the prices it is charging are not covering all costs​ (direct and​ indirect) of providing the tech shirts. Indirect costs of the company include depreciation on the printing machines and utilities. The following data from the most recent year relate to these indirect​ costs: Depreciation, Tech Shirts, Utilities Jan $800 620 $1306 Feb $800 760 $1538 March $800 990 $1887 April $800 1250 $2000 May $800 1230 $1926 June $800 1390 $2148 July $800 1500 $2050 Aug $800 1600 $2250 Sept $800 1340 $2034 Oct $800 1250 $1845 Nov $800 1000 $1400 Dec $800 850 $1200 The management accountant estimates the following regression equation with utilities as the dependent variable and the number of tech shirts as the independent​ variable: y ​= $620 ​+ $1.03X

1. If monthly sales are 1,300 tech​ shirts, what is the full cost per tech​ shirt?​

box 1 (options: direct materials (tech shirts); direct labor (printing); Direct labor (design); fixed costs; total direct costs; variable utilities;) =

box 2 (options: direct materials (tech shirts); direct labor (printing); Direct labor (design); fixed costs; total direct costs; variable utilities;) =

box 3 (options: direct materials (tech shirts); direct labor (printing); Direct labor (design); fixed costs; total direct costs; variable utilities;) =

total full cost per tech shirt =

2. Why has RunAway been experiencing​lower-than-normal profits? ​(Round any interim currency calculations to the nearest cent and enter the profit margin percentage to the nearest whole​ percent, X%.) Runaway has only been earning​ a(n) -- ​% profit margin on each tech shirt sold. Profits are lower than normal because RunAway has not been aware of how the -- (choice option: design, direct, indirect,material, printing) costs have been affecting overall profits. The decision to base prices on 30% markup of direct costs has been -- (effective or ineffective) in recovering all costs plus desired profits related to providing the tech shirts.

3. What price must RunAway charge to recover all costs and earn a 15% margin on all​ sales? ​(Round to the nearest​ cent.) RunAway must charge $--- to earn a 15% margin on all sales. D. What implications will a potential price increase have on RunAway ​and/or its​ customers? How might the owners address any negative reactions from​customers? If RunAway increases its​ price, they --- (choice option may lose, will gain, will not lose customers). The owners of RunAway --- ((a)need not worry about communicating the reason for the increase to its customers, b) will need to carefully approach current customers and explain that current price increase was necessary to cover all costs.)

26. If average labor productivity increases, then the same number of employed workers will always produce:

A) more total output. B) less total output. C) less output per person. D) more output per person.

27. When jobs are hard to find, profits are low, few wage increases are given, and many companies go out of business, the economy is most likely in a(n):

A) expansion.  B)recession.  C) boom.  D) shortage.

28. The rate at which prices in general are increasing is called:

A) the unemployment rate. B) the inflation rate.  C) the trade balance. D) the standard of living.

29.  A trade deficit occurs when:
A)   exports are less than imports.
B)   government revenue exceeds government spending.
C)   government spending exceeds government revenue.
D)   exports exceed imports.

30. Major macroeconomic issues include differences across countries in all of the following EXCEPT:

A) inflation rates B) economic growth rates C) unemployment rates  D) infant mortality rates

31. Macroeconomic issues include all of the following EXCEPT:

A) energy reserves B) productivity  C) economic growth  D) recessions and expansions

Additional information:
⦁   An unpaid salaries and wages as at 31 December 2019 is RM18,000.
⦁   A tenant of an office space has not yet pay a rental for December 2019 amounting RM3,000.
⦁   The company returned defect merchandise bought from supplier and was refunded RM3,500 in cash. The company use perpetual inventory system and this transaction has not yet been recorded.
⦁   The company received RM35,000 in cash from a customer on 30 December 2019 and recorded as sales revenue. However the company only managed to supply the merchandise on 3 January 2020.
⦁   Payment for a one-year insurance coverage was made on 1 July 2019.
⦁   Annual depreciation for building and equipment are based on straight line depreciation basis over a period of 50 years and 10 years respectively with no scrap value.
⦁   30% of the notes payable is due next year. The note payable interest rate is 8% per annum.

REQUIRED:
⦁   Journalise the adjusting entries on 31 December 2019.

Below is an Unadjusted Trial Balance of Jasa Tading Bhd at 31 December 2019.

Additional information:

1. An unpaid salaries and wages as at 31 December 2019 is RM18,000.
2. A tenant of an office space has not yet pay a rental for December 2019 amounting RM3,000.
3. The company returned defect merchandise bought from supplier and was refunded RM3,500 in cash. The company use perpetual inventory system and this transaction has not yet been recorded.
4. The company received RM35,000 in cash from a customer on 30 December 2019 and recorded as sales revenue. However the company only managed to supply the merchandise on 3 January 2020.
5. Payment for a one-year insurance coverage was made on 1 July 2019.
6. Annual depreciation for building and equipment are based on straight line depreciation basis over a period of 50 years and 10 years respectively with no scrap value.
7. 30% of the notes payable is due next year. The note payable interest rate is 8% per annum.

REQUIRED:

1. Journalise the adjusting entries on 31 December 2019.

Below is an Unadjusted Trial Balance of Jasa Tading Bhd at 31 December 2019.

Additional information:

1. An unpaid salaries and wages as at 31 December 2019 is RM18,000.
2. A tenant of an office space has not yet pay a rental for December 2019 amounting RM3,000.
3. The company returned defect merchandise bought from supplier and was refunded RM3,500 in cash. The company use perpetual inventory system and this transaction has not yet been recorded.
4. The company received RM35,000 in cash from a customer on 30 December 2019 and recorded as sales revenue. However the company only managed to supply the merchandise on 3 January 2020.
5. Payment for a one-year insurance coverage was made on 1 July 2019.
6. Annual depreciation for building and equipment are based on straight line depreciation basis over a period of 50 years and 10 years respectively with no scrap value.
7. 30% of the notes payable is due next year. The note payable interest rate is 8% per annum. Prepare a Statement of Financial Position for Jasa Tading Bhd as at 31 December 2019 according to MFRS 101 Presentation of Financial Statement.