GENERAL JOURNAL HAVE 14 ENTRIES
The investment manager of 4th National Bank invests some of the bank’s financial resources in trading securities. During the last quarter of 2018, the following transactions occurred in regard to these trading securities:
| Nov. 5 | Purchased 200 shares of Morgan Company common stock at $86 per share. |
| 19 | Purchased 300 shares of Parker Company preferred stock at $63 per share. |
| 29 | Sold 100 shares of Morgan Company common stock at $89 per share. |
| Dec. 15 | Purchased 400 shares of Tathem Company common stock at $37 per share. |
| 17 | Sold 100 shares of Parker Company preferred stock at $62 per share. |
On December 31, 2018, the market values of the shares were as follows: Morgan, $87 per share; Parker, $61 per share; and Tathem, $37.25 per share. The bank held no trading securities at the beginning of the last quarter of 2018.
Required:
| 1. | Prepare journal entries to record the preceding information. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2. | Show what the bank reports on its fourth quarter 2018 income statement for these trading securities. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3. |
Show how the bank reports these trading securities on its December 31, 2018, balance sheet.
|
In: Accounting
(Efficiency analysis) The Brenmar Sales Company had a gross profit margin (gross profitsdivided bysales) of 32 percent and sales of $ 9.4 million last year. 74 percent of the firm's sales are on credit, and the remainder are cash sales. Brenmar's current assets equal $ 1.4 million, its current liabilities equal $ 300 comma 900, and it has $ 108 comma 200 in cash plus marketable securities.
a. If Brenmar's accounts receivable equal $ 562 comma 100, what is its average collection period?
b. If Brenmar reduces its average collection period to 20 days, what will be its new level of accounts receivable?
c.Brenmar's inventory turnover ratio is 8.3 times. What is the level of Brenmar's inventories?
In: Accounting
On Excel
data shows hours of experience and the corresponding quality scores for employees at a plant. The company is interested in studying the relationship between hours of experience and quality scores.
a)Compute the correlation coefficient between hours of experience and quality scores. Use Excel’s CORREL function.
b)Construct a scatter plot of quality scores vs. hours of experience. Does there appear to be a relationship? What kind?
c)Obtain a regression output that could be used to predict quality scores based on hours of experience. Based on the output, what is the regression equation?
| Hours of experience | Quality Score |
| 1 | 53 |
| 5 | 74 |
| 7 | 59 |
| 8 | 43 |
| 10 | 56 |
| 11 | 84 |
| 14 | 96 |
| 15 | 69 |
| 15 | 84 |
| 19 | 83 |
In: Operations Management
Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 15,600
units. Southeastern estimates its annual holding cost for this item to be ?$26 per unit. The cost to place and process an order from the supplier is ?$74.
The company operates 300 days per? year, and the lead time to receive an order from the supplier is 2 working days.
a. what is the economic order quantity? (round to the nearest whole number)
b. what are the annual holding costs? (round to the nearest whole number)
c. what are the annual ordering costs? (round to the nearest whole number)
d. what is the reorder point? (round to the nearest whole number)
In: Operations Management
1.) Bonds payable is a(n) _________________ account.
Multiple Choice: Choose one of the following listed below
Asset, Liability, Equity, Revenue, Expense
2.) Discount on Bonds Payable is a(n) _________________ account.
Multiple Choice
Asset, Liability, Equity, Revenue, Expense
3.) Common Stock is a(n) _________________ account.
Multiple Choice
Asset, Liability, Equity, Revenue, Expense
4.) Dividends is a(n) _________________ account.
Multiple Choice
Asset, Liability, Equity, Revenue, Expense
5.) Premium on Bonds Payable is a(n) _________________ account.
Multiple Choice
Asset, Liability, Equity, Revenue, Expense
6.) Preferred Stock is a(n) _________________ account.
Multiple Choice
Asset, Liability, Equity, Revenue, Expense
7.) Treasury Stock is a(n) _________________ account.
Multiple Choice
Asset, Liability, Equity, Revenue, Expense
8.) Accounts receivable is a(n) _________________ account.
Multiple Choice
Asset, Liability, Equity, Revenue, Expense
9.) Cash is a(n) _________________ account.
Multiple Choice
Asset, Liability, Equity, Revenue, Expense
10.) Accumulated Depreciation is a(n) _________________ account.
Multiple Choice
Asset, Liability, Equity, Revenue, Expense
In: Accounting
Question 1:
Menara Wealth Management involved the following transactions during September 2020, the first month of its operation:
|
Date |
Transactions |
|
September 1 |
Started a financial planning services company by investing RM150,000 cash and office equipment of RM50,000. |
|
2 |
Purchased RM12,000 of office equipment by cash. |
|
3 |
Purchased RM3,000 of office supplies on credit. |
|
4 |
Completed service for a client and received a payment of RM9,000 cash. |
|
8 |
Completed service for Syarikat Bizara on credit amounted to RM17,000. |
|
10 |
Paid the supplier for the office supplies purchased on 3 September. |
|
14 |
Paid RM9,600 being the annual premium for an insurance policy. |
|
18 |
Received payment in full from Syarikat Bizara for the service completed on 8 September. |
|
27 |
Owner withdrew RM6,500 cash from the company for personal expenses. |
|
30 |
Paid RM1,750 cash for the utility bills in September. |
|
31 |
Received RM20,000 cash from a client for a financial service to be rendered next year. |
Required:
(5.75)
(6)
(2.75)
In: Accounting
Bickel Corporation uses customers served as its measure of activity. The following report compares the planning budget to the actual operating results for the month of November:
| Bickel Corporation | ||||||||
| Comparison of Actual Results to Planning Budget | ||||||||
| For the Month Ended November 30 | ||||||||
| Actual Results | Planning Budget | Variances | ||||||
| Customers served | 36,000 | 35,000 | ||||||
| Revenue ($3.40q) | $ | 122,300 | $ | 119,000 | $ | 3,300 | F | |
| Expenses: | ||||||||
| Wages and salaries ($23,500 + $1.25q) | 68,500 | 67,250 | 1,250 | U | ||||
| Supplies ($0.65q) | 20,450 | 22,750 | 2,300 | F | ||||
| Insurance ($5,400) | 5,400 | 5,400 | 0 | None | ||||
| Miscellaneous expense ($4,400 + $0.34q) | 14,000 | 16,300 | 2,300 | F | ||||
| Total expense | 108,350 | 111,700 | 3,350 | F | ||||
| Net operating income | $ | 13,950 | $ | 7,300 | $ | 7,150 | F | |
Required:
Prepare the company's flexible budget performance report for November. Label each variance as favorable (F) or unfavorable (U). (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.)
In: Accounting
Franklin Manufacturing produces two keyboards, one for laptop
computers and the other for desktop computers. The production
process is automated, and the company has found activity-based
costing useful in assigning overhead costs to its products. The
company has identified five major activities involved in producing
the keyboards.
| Activity | Allocation Base | Allocation Rate | |||
| Materials receiving & handling | Cost of material | 1 % of material cost | |||
| Production setup | Number of setups | $ | 113.00 | per setup | |
| Assembly | Number of parts | $ | 5.00 | per part | |
| Quality inspection | Inspection time | $ | 1.20 | per minute | |
| Packing and shipping | Number of orders | $ | 11.00 | per order | |
Activity measures for the two kinds of keyboards follow:
| Labor Cost | Material Cost | Number of Setups | Number of Parts | Inspection Time | Number of Orders | |||||||||||||
| Laptops | $ | 1,310 | $ | 5,700 | 27 | 50 | 7,100 | min. | 62 | |||||||||
| Desktops | 1,200 | 7,100 | 13 | 27 | 5,100 | min. | 15 | |||||||||||
Required
Compute the cost per unit of laptop and desktop keyboards, assuming that Franklin made 290 units of each type of keyboard. (Round your answers to 2 decimal places.)
In: Accounting
C8-3 Recording Daily and Adjusting Entries Using FIFO in a Perpetual Inventory System (Chapters 3, 4, 6, 7, and 8) (LO 3-3, 4-2, 4-3, 4-4, 6-3, 6-4, 6-5, 7-3, 8-2, 8-3) (General Ledger)
| One Trick Pony (OTP) incorporated and began operations near the end of the year, resulting in the following post-closing balances at December 31: |
| Cash | $ | 18,620 |
| Accounts Receivable | 9,650 | |
| Allowance for Doubtful Accounts | 900* | |
| Inventory | 2,800 | |
| Unearned Revenue (30 units) | 4,350 | |
| Accounts Payable | 1,300 | |
| Notes Payable (long-term) | 15,000 | |
| Common Stock | 5,000 | |
| Retained Earnings | 4,520 | |
* credit balance.
|
The following information is relevant to the first month of operations in the following year: |
|
|
|
OTP will sell inventory at $145 per unit. OTP’s January 1 inventory balance consists of 35 units at a total cost of $2,800. OTP’s policy is to use the FIFO method, recorded using a perpetual inventory system. |
|
|
In December, OTP received a $4,350 payment for 30 units to be delivered in January; this obligation was recorded in Unearned Revenue. Rent of $1,300 was unpaid and recorded in Accounts Payable at December 31. |
|
|
OTP’s note payable matures in three years, and accrues interest at a 10% annual rate. |
| January Transactions | |
| 1. |
Included in OTP’s January 1 Accounts Receivable balance is a $1,500 balance due from Jeff Letrotski. Jeff is having cash flow problems and cannot pay the $1,500 balance at this time. On 01/01, OTP arranges with Jeff to convert the $1,500 balance to a 6-month note, at 12% annual interest. Jeff signs the promissory note, which indicates the principal and all interest will be due and payable to OTP on July 1 of this year. |
| 2. |
OTP paid a $500 insurance premium on 01/02, covering the month of January; the payment is recorded directly as an expense. |
| 3. |
OTP purchased an additional 150 units of inventory from a supplier on account on 01/05 at a total cost of $9,000, with terms 2/15, n/30. |
| 4. |
OTP paid a courier $300 cash on 01/05 for same-day delivery of the 150 units of inventory. |
| 5. |
The 30 units that OTP’s customer paid for in advance in December are delivered to the customer on 01/06. |
| 6. |
On 01/07, OTP paid the amount necessary to settle the balance owed to the supplier for the 1/05 purchase of inventory (in 3). |
| 7. |
Sales of 40 units of inventory occuring during the period of 01/07 – 01/10 are recorded on 01/10. The sales terms are 2/10, n/30. |
| 8. |
Collected payments on 01/14 from sales to customers recorded on 01/10. The discount was properly taken by customers on $5,800 of these credit sales; consequently, OTP received less than $5,800. |
| 9. | OTP paid the first 2 weeks wages to the employees on 01/16. The total paid is $2,200. |
| 10. |
Wrote off a $1,000 customer’s account balance on 01/18. OTP uses the allowance method, not the direct write-off method. |
| 11. |
Paid $2,600 on 01/19 for December and January rent. See the earlier bullets regarding the December portion. The January portion will expire soon, so it is charged directly to expense. |
| 12. |
OTP recovered $400 cash on 01/26 from the customer whose account had previously been written off on 01/18. |
| 13. | An unrecorded $400 utility bill for January arrived on 01/27. It is due on 02/15 and will be paid then. |
| 14. | Sales of 65 units of inventory during the period of 01/10 – 01/28, with terms 2/10, n/30, are recorded on 01/28. |
| 15. |
Of the sales recorded on 1/28, 15 units are returned to OTP on 01/30. The inventory is not damaged and can be resold. |
| 16. | On 01/31, OTP records the $2,200 employee salary that is owed but will be paid February 1. |
| 17. |
OTP uses the aging method to estimate and adjust for uncollectible accounts on 01/31. All of OTP’s accounts receivable fall into a single aging category, for which 8% is estimated to be uncollectible. (Update the balances of both relevant accounts prior to determining the appropriate adjustment, and round your calculation to the nearest dollar.) |
| 18. | Accrue interest for January on the note payable on 01/31. |
| 19. |
Accrue interest for January on Jeff Letrotski’s note on 01/31 (see 1) Requirement General Journal tab - Prepare all
January journal entries and adjusting entries for items 1–19.
Review the 'General Ledger' and the adjusted 'Trial Balance' Tabs
to see the effect of the transactions on the account
balances. |
In: Accounting
BALEY CORPORATION PLANNING RISK ASSESSMENT
You are in the process of planning for the audit of a newly obtained client Baley Corporation, for the year ended December 31, 2017. Baley is regulated by the state utility commission and because it is a publicly traded company the audited financial statements must be filed with the Securities and Exchange Commission (SEC).
During the risk assessment you have learned the following:
Baley is considerably more profitable than many of its competitors, largely due to its extensive investment in information technologies used in its energy distribution and other key business processes. Recent growth into rural markets, however, has placed some strain on 2017 operations.
Baley expanded its investments into speculative markets and is also making greater use of derivative and hedging transactions to mitigate some of its investment risks. Because of the complexities of the underlying accounting associated with these activities, Baley added several highly experienced accountants within its financial reporting team. Internal audit, which has direct reporting responsibility to the audit committee, is also actively involved in reviewing key accounting assumptions and estimates on a quarterly basis.
Your discussions with the predecessor auditor revealed that the client has experienced some difficulty in correctly tracking existing property, plant, and equipment items. This largely involves equipment located at its multiple energy production facilities. During the recent year, Baley acquired a regional electric company, which expanded the number of energy production facilities.
You plan to staff the audit engagement with several members of the firm who have experience in auditing energy and public companies. The extent of partner review of key accounts will be extensive.
Required:
Based on the above information, discuss the risk factors in the December 31, 2017, financial statements of Baley Corporation. In your discussion, identify the audit risk model component (Audit Risk, Inherent Risk, Control Risk, or Detection Risk) affected by the risk factor and the impact on both the audit risk model component (Increase or Decrease) and the sufficiency and appropriateness of the evidence. Provide examples of evidence when appropriate (your examples can be used more than once). The best way to organize your case is to discuss each risk factor separately. For example:
Baley Corporation is a new audit client for the firm. The engagement team will be unfamiliar with the operations, personnel, and controls of Baley Corporation. When auditors are unfamiliar with the client’s business, this can cause an increase in the risk of material misstatement, specifically inherent risk. In addition, since this is a new client, the firm may wish to lower audit risk. The engagement team will need to increase both the amount of evidence and the quality of evidence. Larger sample sizes may be necessary for key accounts such as Cash, Accounts Receivable, Sales. The engagement team may want to test equipment in multiple locations. An increase in direct evidence will be required; for example, bank statements sent directly from the bank to the auditor, and accounts receivable confirmations.
In: Accounting