Job Order Cost Sheet

Remnant Carpet Company sells and installs commercial carpeting for office buildings. Remnant Carpet Company uses a job order cost system. When a prospective customer asks for a price quote on a job, the estimated cost data are inserted on an unnumbered job cost sheet. If the offer is accepted, a number is assigned to the job, and the costs incurred are recorded in the usual manner on the job cost sheet. After the job is completed, reasons for the variances between the estimated and actual costs are noted on the sheet. The data are then available to management in evaluating the efficiency of operations and in preparing quotes on future jobs. On October 1, Remnant Carpet Company gave Jackson Consulting an estimate of $2,652 to carpet the consulting firm’s newly leased office. The estimate was based on the following data:

On October 3, Jackson Consulting signed a purchase contract, and the delivery and installation were completed on October 10.

The related materials requisitions and time tickets are summarized as follows:

Required:

Enter amounts as positive numbers.

1. Complete that portion of the job order cost sheet that would be prepared when the estimate is given to the customer.

2. Record the costs incurred, and complete the job order cost sheet.

Financial Statements and Closing Entries

The Gorman Group is a financial planning services firm owned and operated by Nicole Gorman. As of October 31, 20Y9, the end of the fiscal year, the accountant for The Gorman Group prepared an end-of-period spreadsheet, part of which follows:

Required:

1. Prepare an income statement.

Prepare a statement of stockholders’ equity. During the year, no additional Common stock was issued. If an amount box does not require an entry, leave it blank. If a Net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign.

Prepare a balance sheet.

2. Journalize the entries that were required to close the accounts at October 31. If an amount box does not require an entry, leave it blank.

3. If the balance of Retained earnings had instead increased $35,000 after the closing entries were posted, and the dividends remained the same, what would have been the amount of Net income or Net loss? Enter all amounts as positive numbers.
$

Cash Budget

The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information:

The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $7,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month.

Current assets as of September 1 include cash of $43,000, marketable securities of $62,000, and accounts receivable of $127,300 ($100,000 from July sales and $27,300 from August sales). Sales on account for July and August were $91,000 and $100,000, respectively. Current liabilities as of September 1 include $7,000 of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $17,000 will be made in October. Bridgeport’s regular quarterly dividend of $7,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $42,000.

Required:

1. Prepare a monthly cash budget and supporting schedules for September, October, and November. Assume 360 days per year for interest calculations.

2. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?

The budget indicates that the minimum cash balance will  be maintained in November. This situation can be corrected by investing  and/or by the purchase  of the marketable securities, if they are held for such purposes. At the end of September and October, the cash balance will exceed  the minimum desired balance.

Cash Budget

The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information:

The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $7,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month.

Current assets as of September 1 include cash of $37,000, marketable securities of $52,000, and accounts receivable of $108,400 ($85,000 from July sales and $23,400 from August sales). Sales on account for July and August were $78,000 and $85,000, respectively. Current liabilities as of September 1 include $7,000 of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $14,000 will be made in October. Bridgeport’s regular quarterly dividend of $7,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $36,000.

Required:

1. Prepare a monthly cash budget and supporting schedules for September, October, and November. Input all amounts as positive values except overall cash decrease and deficiency which should be indicated with a minus sign. Assume 360 days per year for interest calculations.

2. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?

The budget indicates that the minimum cash balance be maintained in November. This situation can be corrected by and/or by the of the marketable securities, if they are held for such purposes. At the end of September and October, the cash balance will the minimum desired balance.

Job Order Cost Sheet

Remnant Carpet Company sells and installs commercial carpeting for office buildings. Remnant Carpet Company uses a job order cost system. When a prospective customer asks for a price quote on a job, the estimated cost data are inserted on an unnumbered job cost sheet. If the offer is accepted, a number is assigned to the job, and the costs incurred are recorded in the usual manner on the job cost sheet. After the job is completed, reasons for the variances between the estimated and actual costs are noted on the sheet. The data are then available to management in evaluating the efficiency of operations and in preparing quotes on future jobs. On October 1, Remnant Carpet Company gave Jackson Consulting an estimate of $9,450 to carpet the consulting firm’s newly leased office. The estimate was based on the following data:

On October 3, Jackson Consulting signed a purchase contract, and the delivery and installation was completed on October 10.

The related materials requisitions and time tickets are summarized as follows:

Required:

Enter amounts as positive numbers.

1. Complete that portion of the job order cost sheet that would be prepared when the estimate is given to the customer.

2. Record the costs incurred and complete the job order cost sheet.

Genesis Corp. is a traditional retailer that recently also started an Internet-based subsidiary that sells its product online. Its sales in September 2017 were $700,000. Tom Scott, the company president, is preparing for a meeting with Dan Harris, a loan officer with Mojito Bank, to review year end financing requirements. After discussions with the company’s marketing and finance managers, sales over the next three months were forecasted as follows. Sales in October 2017: $2,500,000, sales in November 2017: $3,500,000 and sales in December 2017: $2,750,000.

Genesis’ balance sheet as of the end of September, 2017 was as follows.

____________________________________________________________________

Genesis Corporation                                                             

Balance Sheet as of September 30, 2017 (in $ Thousands)

____________________________________________________________________

Cash                              $ 60                               Accounts payable         $   10                         

Accounts receivable         700                               Notes payable                  800

Inventories                       600                              Long-term debt               400

Net fixed assets               750                                  Total liabilities          1,210

                                                                                       Equity                           900

          Total assets          $2,110                                       Total                   $2,110

     ____________________________________________________________________

All sales are made on credit terms of net 30 days and are collected the following month and no bad debts are anticipated. The accounts receivable on the balance sheet at the end of September thus will be collected in October. The October sales will be collected in November, and so on. The amount of Inventory on hand represents the operating level which the company intends to maintain (i.e., not percentage of sales). Cost of goods sold average 80 percent of sales. Inventory is purchased in the month of sale and paid for in cash. Other cash expenses average 7 percent of sales. Depreciation is $10,000 per month. Assume taxes are paid monthly and the effective income tax rate is 40 percent for planning purposes.

      The annual interest rate on outstanding long term debt and notes payable is 12% per annum. There are no capital expenditures planned during the period, and no dividends will be paid. The company’s desired end-of-month cash balance is $80,000. The president hopes to meet any cash shortages during the period by borrowing (short term) from the bank at the end of the month. The interest rate on the new bank loans will be 12% per annum. All interest expenses are estimated based on last month’s debt.

Prepare monthly pro forma cash budgets for October, November, and December 2017.                        

                                                                                                                                 .

Prepare monthly pro forma income statements for October, November, and December 2017.                                                                                                                  .

Prepare monthly pro forma balance sheets at the end of October, November, and December 2017.                                                                                                  .

Use 2 decimals point in your reports.

The demand for solvent, one of numerous products manufactured by Logan Industries Inc., has dropped sharply because of recent competition from a similar product. The company’s chemists are currently completing tests of various new formulas, and it is anticipated that the manufacture of a superior product can be started on November 1, one month in the future. No changes will be needed in the present production facilities to manufacture the new product because only the mixture of the various materials will be changed.

The controller has been asked by the president of the company for advice on whether to continue production during October or to suspend the manufacture of solvent until November 1. The following data have been assembled:

The production costs and selling and administrative expenses, based on production of 10,000 units in September, are as follows:

Sales for October are expected to drop about 40% below those of September. No significant changes are anticipated in the fixed costs or variable costs per unit. No extra costs will be incurred in discontinuing operations in the portion of the plant associated with solvent. The inventory of solvent at the beginning and end of October is not expected to be significant (material).

1. Cash Budget

   The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information:

   	September		October		November
   Sales	$118,000		$142,000		$199,000
   Manufacturing costs	50,000		61,000		72,000
   Selling and administrative expenses	41,000		43,000		76,000
   Capital expenditures	_		_		48,000

   The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $7,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month.

   Current assets as of September 1 include cash of $45,000, marketable securities of $64,000, and accounts receivable of $131,200 ($103,000 from July sales and $28,200 from August sales). Sales on account for July and August were $94,000 and $103,000, respectively. Current liabilities as of September 1 include $7,000 of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $17,000 will be made in October. Bridgeport’s regular quarterly dividend of $7,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $44,000.

   Required:

   1. Prepare a monthly cash budget and supporting schedules for September, October, and November. Input all amounts as positive values except overall cash decrease and deficiency which should be indicated with a minus sign. Assume 360 days per year for interest calculations.

   Bridgeport Housewares Inc.
   Cash Budget
   For the Three Months Ending November 30
   	September	October	November
   Estimated cash receipts from:
   Cash sales	$	$	$
   Collection of accounts receivable
   Total cash receipts	$	$	$
   Less estimated cash payments for:
   Manufacturing costs	$	$	$
   Selling and administrative expenses
   Capital expenditures
   Other purposes:
   Income tax
   Dividends
   Total cash payments	$	$	$
   Cash increase or (decrease)	$	$	$
   Plus cash balance at beginning of month
   Cash balance at end of month	$	$	$
   Less minimum cash balance
   Excess or (deficiency)	$	$	$

   2. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?

   The budget indicates that the minimum cash balance will be maintained in November. This situation can be corrected by and/or by the    of the marketable securities if they are held for such purposes. At the end of September and October, the cash balance will the minimum desired balance.

Multiple Choice

(1) When energy derived from ATP hydrolysis is coupled to an endergonic enzymatic reaction, which of the following is the most likely mechanistic description of this coupling?

a. ATP binds at a regulatory site and puts the enzyme in a more active conformation.

b. ATP binds at one active site of the enzyme and the substrate(s) bind at another.

c. Hydrolysis of ATP provides the energy for the endergonic reaction at the active site where the substrate(s) are bound.

d. ATP and substrate compete for binding to the same active site.

(2) End product feedback inhibition of multistep pathways is a major mechanism for cellular regulation. In this proccess, the

a. product of the last enzyme inhibits the substrate of the last enzyme.

b. product of an early metabolically irreversible enzyme inhibits the last enzyme in the pathway.

c. An early regulatory enzyme in the pathway is inhibited when ATP concentrations are depleted.

d. product of one of the last enzymes inhibits an early regulatory enzyme in he pathway

(3) The conversion of glucose to pyruvate is a multistep process requiring ten enzymes. If a mutation occurrs resulting in a lack of activity for one of these enzymes, which of the following happens?

a. the concentration of the metabolic intermediate which is the substrate of the missing enzyme is likely to increase and accumulate.

b. the cell will produce more of the other nine enzymes to maintain steady state.

c. the concentration of the metabolic intermediate which is the product of the missing enzyme will increase

d. pyruvate production will increase, leading to feedback regulation of the pathway

Individuals filing federal income tax returns prior to March 31 received an average refund of $1,076. Consider the population of "last-minute" filers who mail their tax return during the last five days of the income tax period (typically April 10 to April 15).

a. A researcher suggests that a reason individuals wait until the last five days is that on average these individuals receive lower refunds than do early filers. Develop appropriate hypotheses such that rejection of H0 will support the researcher's contention. H0 : is ? Ha : is ?

b. For a sample of 400 individuals who filed a tax return between April 10 and 15, the sample mean refund was $930. Based on prior experience a population standard deviation of = $1,600 may be assumed. What is the p-value (to 4 decimals)?

c. Using = .05, can you conclude that the population mean refund for "last minute" filers is less than the population mean refund for early fliers? Answer the next three questions using the critical value approach.

d. Using = .05, what is the critical value for the test statistic (to 3 decimals)? If your answer is negative use minus "-" sign.

e. State the rejection rule: Reject H0 if z is the critical value.

f. Using = .05, can you conclude that the population mean refund for "last minute" filers is less than the population mean refund for early filers?