IGY is a US manufacturer of many types of high quality products. You are a member of the Accounting Department at IGY, LTD and you have been provided with 2020 budget estimates for Department A.
Your team is responsible to complete the following budgets for Quarter 1 (January, February and March) of 2020:
Sales
Production
Direct Materials
Direct Labor
Manufacturing Overhead
Selling & Administrative
Cash Collections
Cash Disbursements
Cash Budget
Cost of Goods Sold
Income Statement
You will need to complete some budgets for April 2020 to have the information you need for the March 2020 budget. You can make a supplementary schedule next to the budget, but show the work for April in a professional manner.
| Budget Information from Management | |
| Prepare Master Budget for Quarter 1 | |
| Sales Forecast | Units |
| January | 5,000 |
| February | 6,000 |
| March | 7,500 |
| April | 8,000 |
| May | 7,500 |
| Selling price per unit | $ 31.00 |
| Full Product Cost per Unit | $ 21.00 |
| Finished Goods Inventory | |
| Desired Finished Goods Ending Inventory-20 % Following Months Sales | 20% |
| January 1, 2020 Beginning Inventory Finished Goods in Units | 1,700 |
| Raw Materials Cost and Usage | |
| Desired Ending Raw Materials Inventory-50 % Following Months Materials Requirements | 50% |
| January 1,2020 Raw Materials Beginning Inventory- in Units | 4,925 |
| Expected June RM Ending Inventory-in Units | 4,000 |
| RM Cost per pound | $7.25 |
| RM used per unit of product - 2 pounds per unit | 2 |
| Hints: | |
|
1-- You will need April's production needs to complete the March Direct Materials Budget |
|
| Direct Labor Cost | |
| Direct labor per unit (% of hour) | 50% |
| Direct labor hourly rate | $20 |
| Overhead Expense | |
| Variable: Allocated per Direct Labor Hour | 4.20 |
| Fixed monthly overhead- Excluding Depreciation Expense | 20,000 |
| Fixed Overhead - Depreciation Expense | 5,000 |
| Selling Expenses | |
| Sales representative commission (paid in month of sale) | 5% |
| Sales manger's monthly salary | 9,000 |
| Administrative Expenses | |
| Monthly general & adminstrative expenses | 10,000 |
| Monthly interest on long-term note payable | 0.50% |
| Sale of Securities - Plan to sell securities in March | $84,000 |
| Cash Collections | |
| Collected in Month of Sale | 30% |
| Receivables collected in full month following sale | 70% |
| Accounts Recievable Balance January 1, 2020 | $165,000 |
| Cash Disbursements | |
| Raw materials purchased on credit. Paid in full the month following the purchase | 100% |
| Raw materials purchases in December | $98,500 |
| Direct Labor- Paid in the month incurred | 100% |
| Dividends are declared and paid in March | $ 2,500 |
| Tax Payments | |
| The company pays estimated income taxes of $15,500 on the last day of each quarter | $5,500 |
| Capital Purchases | |
| Equipment purchase is budgeted for the last day of March | $7,500 |
| Minimum Cash Balances | |
| Minimum ending cash balance for all months is $50,000. If necessary, the company borrows cash using a short-term line of credit at 1% per month paid at the end of Quarter 2 (June). | |
| Minumum cash balance | 50,000 |
| Monthly interest rate | 1% |
| Beginning Cash Balance on January 1,2020 | 50,000 |
In: Accounting
Assuming you are the CEO of the firm you chose in week 1, you are considering to enter the foreign markets. What are some challenges you might encounter in entering the foreign markets? What additional factors are encountered in international as compared with domestic financial management? Discuss each briefly with examples?
In: Finance
You are a manager of Nike based on Beaverton, Oregon. The CEO has decided to open a new shop in Chile for first time and would like to send you up there as new manager. Discuss the implications of the global monetary system we learned in class on your work in Chile. 200 words
In: Economics
With globalization, many business organizations have come to terms that increasingly their employees come from a range of different religious, national and cultural background. As CEO of a multinational firm operating in Ghana, with knowledge in the concepts and principles of Business Ethics offer an example and explain how you will manage your employees.
In: Finance
Bates Company has entered into two lease agreements. In each case the cash equivalent purchase price of the asset acquired is known and you wish to find the interest rate which is applicable to the lease payments.
Lease A - Lease A covers office equipment which could be
purchased for $165,500. Bates Company has, however, chosen to lease
the equipment for $38,000 per year, payable at the end of each of
the next 6 years.
Calculate the implied interest rate for the lease payments.
(Round factor values to 5 decimal places, e.g. 1.25124
and final answer to 0 decimal places, e.g. 5%.) Interest Rate
____%
Lease B - Lease B applies to a machine which can be purchased
for $167,572. Bates Company has chosen to lease the machine for
$27,000 per year on a 8-year lease. Payments are due at the start
of each year.
Calculate the implied interest rate for the lease payments.
(Round factor values to 5 decimal places, e.g. 1.25124
and final answer to 0 decimal places, e.g. 5%.) Interest Rate
_____%
In: Accounting
Paste Corporation acquired 70 percent of Stick Company's stock
on January 1, 20X9, for $105,000. At that date, the fair value of
the noncontrolling interest was equal to 30 percent of the book
value of Stick Company. The companies reported the following
stockholders’ equity balances immediately after the
acquisition:
| Paste Corporation |
Stick Company |
|||||||
| Common Stock | $ | 120,000 | $ | 30,000 | ||||
| Additional Paid-in Capital | 230,000 | 80,000 | ||||||
| Retained Earnings | 290,000 | 40,000 | ||||||
| Total | $ | 640,000 | $ | 150,000 | ||||
Paste and Stick reported 20X9 operating incomes of $90,000 and
$35,000 and dividend payments of $30,000 and $10,000,
respectively.
Required:
a. Compute the amount reported as net income by each company for
20X9, assuming Paste uses equity-method accounting for its
investment in Stick.
| Paste | Stick | |
| Net income |
b. Compute consolidated net income for 20X9.
| Net Income |
c. Compute the reported balance in retained earnings at December
31, 20X9, for both companies.
| Paste | Stick | |
| Retained Earnnings |
d. Compute consolidated retained earnings at December 31,
20X9.
| Consolidated Retained Earnings |
In: Accounting
HI There, there is no solution for a problem that I am looking for. Advanced Accouting - Chapter 4, problem 30. Can you please assist? Thanks.
|
Posada Company acquired 7,000 of the 10,000 outstanding shares of Sabathia Company on January 1, 2013, for $840,000. The subsidiary’s total fair value was assessed at $1,200,000 although its book value on that date was $1,130,000. The $70,000 fair value in excess of Sabathia’s book value was assigned to a patent with a 5-year remaining life. |
|
On January 1, 2015, Posada reported a $1,085,000 equity method balance in the Investment in Sabathia Company account. On October 1, 2015, Posada sells 1,000 shares of the investment for $191,000. During 2015, Sabathia reported net income of $120,000 and declared dividends of $40,000. These amounts are assumed to have occurred evenly throughout the year. |
| a. |
How should Posada report the 2015 income that accrued to the 1,000 shares prior to their sale? (Do not round your intermediate calculations.)
|
In: Accounting
The following information applies to the questions displayed
below.]
Laker Company reported the following January purchases and sales
data for its only product.
| Date | Activities | Units Acquired at Cost | Units sold at Retail | |||||||||||||||
| Jan. | 1 | Beginning inventory | 170 | units | @ | $ | 9.50 | = | $ | 1,615 | ||||||||
| Jan. | 10 | Sales | 130 | units | @ | $ | 18.50 | |||||||||||
| Jan. | 20 | Purchase | 120 | units | @ | $ | 8.50 | = | 1,020 | |||||||||
| Jan. | 25 | Sales | 130 | units | @ | $ | 18.50 | |||||||||||
| Jan. | 30 | Purchase | 240 | units | @ | $ | 8.00 | = | 1,920 | |||||||||
| Totals | 530 | units | $ | 4,555 | 260 | units | ||||||||||||
The Company uses a perpetual inventory system. For specific
identification, ending inventory consists of 270 units, where 240
are from the January 30 purchase, 5 are from the January 20
purchase, and 25 are from beginning inventory.
Required:
1. Complete comparative income statements for the month of
January for Laker Company for the four inventory methods. Assume
expenses are $1,550 and that the applicable income tax rate is 40%.
(Round your Intermediate calculations to 2 decimal
places.)
In: Accounting
Anteium Company owes $81,100 on a note payable that is currently due. The note is held by a local bank and is secured by a mortgage lien attached to three acres of land worth $48,500. The land originally cost Anteium $31,500 when acquired several years ago. The only other account balances for this company are Investments of $22,600 (but worth $27,600), Accounts Payable of $22,200, Common Stock of $41,200, and a deficit of $89,400. Anteium is insolvent and attempting to arrange a reorganization so that the business can continue to operate. The reorganization value of the company is $83,500.
View each of the following as an independent situation:
On a statement of financial affairs, how would this note be reported? How would the land be shown?
Assume that Anteium develops an acceptable reorganization plan. Sixty percent of the common stock is transferred to the bank to settle that particular obligation. A 7 percent, three-year note payable for $5,160 is used to settle the accounts payable. How would Anteium record the reorganization?
Assume that Anteium is liquidated. The land and investments are sold for $50,500 and $28,600, respectively. Administrative expenses amount to $13,400. How much will the various parties collect?
In: Accounting
Required information [The following information applies to the questions displayed below.] Laker Company reported the following January purchases and sales data for its only product. Date Activities Units Acquired at Cost Units sold at Retail Jan. 1 Beginning inventory 140 units @ $ 6.00 = $ 840 Jan. 10 Sales 100 units @ $ 15 Jan. 20 Purchase 60 units @ $ 5.00 = 300 Jan. 25 Sales 80 units @ $ 15 Jan. 30 Purchase 180 units @ $ 4.50 = 810 Totals 380 units $ 1,950 180 units The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 200 units, where 180 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory. Required: 1. Complete comparative income statements for the month of January for Laker Company for the four inventory methods. Assume expenses are $1,250, and that the applicable income tax rate is 40%. (Round your Intermediate calculations to 2 decimal places.)
In: Finance