On June 1, 2018, Waterway Company and Wildhorse Company merged to form Sheffield Inc. A total of 769,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis. On April 1, 2020, the company issued an additional 599,000 shares of stock for cash. All 1,368,000 shares were outstanding on December 31, 2020. Sheffield Inc. also issued $600,000 of 20-year, 8% convertible bonds at par on July 1, 2020. Each $1,000 bond converts to 36 shares of common at any interest date. None of the bonds have been converted to date. Sheffield Inc. is preparing its annual report for the fiscal year ending December 31, 2020. The annual report will show earnings per share figures based upon a reported after-tax net income of $1,688,000. (The tax rate is 20%.) Determine the following for 2020. (a) The number of shares to be used for calculating: (Round answers to 0 decimal places, e.g. $2,500.) (1) Basic earnings per share enter a number of shares rounded to 0 decimal placesEntry field with incorrect answer 1.39 shares (2) Diluted earnings per share enter a number of shares rounded to 0 decimal placesEntry field with incorrect answer 4800 shares (b) The earnings figures to be used for calculating: (Round answers to 0 decimal places, e.g. $2,500.) (1) Basic earnings per share $enter a dollar amount rounded to 0 decimal placesEntry field with incorrect answer 1.78 (2) Diluted earnings per share

Empire Company is a manufacturer of smart phones. Its controller resigned in October 2020. An inexperienced assistant accountant has prepared the following income statement for the month of October 2020.

EMPIRE COMPANY
Income Statement
For the Month Ended October 31, 2020
Sales revenue               $795,000   
Less:   Operating expenses                  
Raw materials purchases       $264,600           
Direct labor cost       190,200           
Advertising expense       91,000           
Selling and administrative salaries       77,800           
Rent on factory facilities       61,000           
Depreciation on sales equipment       45,800           
Depreciation on factory equipment       32,500           
Indirect labor cost       28,200           
Utilities expense       11,600           
Insurance expense       8,300        811,000   
Net loss               $(16,000)  

Prior to October 2020, the company had been profitable every month. The company’s president is concerned about the accuracy of the income statement. As her friend, you have been asked to review the income statement and make necessary corrections. After examining other manufacturing cost data, you have acquired additional information as follows.

1. Inventory balances at the beginning and end of October were:

October 1
October 31
Raw materials       $19,700       $36,000
Work in process       19,400       14,700
Finished goods       29,900       53,500

2. Only 75% of the utilities expense and 60% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities.
(a)
Prepare a schedule of cost of goods manufactured for October 2020.

EMPIRE COMPANY
Cost of Goods Manufactured Schedule

Snowbird Inc. (Snowbird) manufactures and sells one model of sleds. Snowbird’s accountant gathered the following information to prepare the budget for 2020:

Snowbird has a policy of maintaining finished goods inventory at the end of each quarter equal to 5% of the following quarter’s projected sales. There were 150 sleds in finished goods inventory at the start of 2020, with a total cost of $45,000. Materials and labour requirements for the sleds are:

Direct materials inventory on the first day of 2020 was 1,000 board-metres. Direct materials were originally purchased at $33 per board-metre. Prices have now risen to

$34 per board-metre. The desired ending materials inventory is 10% of the following quarter’s projected production needs.

Snowbird’s direct labourers are paid $16 per hour. Variable manufacturing overhead is allocated at the rate of $15 per direct labour hour. Fixed manufacturing overhead costs are budgeted at $186,240 for 2020. Snowbird uses first-in, first-out to account for its inventory flow.

Required:

Prepare the following budgets and schedules as part of the master budget for the first quarter of 2020:

1. Production budget
2. Direct materials purchase budget
3. Direct labour budget (
4. Manufacturing overhead budget
5. Ending finished goods inventory budget

Glaser Company carries the following investments on its books at December 31, 2020 and December 31, 2021. Available for-Sale securities are considered to be non-current. All securities were purchased and properly recorded during February 2020. You need to combine all trading and AFS securities into trading portfolio and AFS portfolio, respectively, while making the fair value adjustment entries.

Required:

• Prepare the necessary fair value adjusting journal entries for Glaser on December 31, 2020.
• Assume Glaser sold its investment in “B” for $125 on December 15, 2021; prepare journal entries for sales of investment on December 15 and fair value adjusting journal entries on December 31, 2021.

• Ignoring income taxes and assuming both the retained earnings and accumulated other comprehensive income have a balance of 0 on December 31, 2019, complete the following schedule:

Entity A is a manufacturer of consumer goods. On 1 January 2020, Entity A entered into a one-year contract to sell goods to a large global chain of retail stores. The customer committed to buy at least $90,000,000 of products in January. The contract required Entity A to make a non-refundable payment of $200,000 to the customer at the inception of the contract. The $200,000 payment is to compensate the customer for the changes required to its shelving to accommodate Entity A's products. Entity A duly paid this $200,000 to the customer on 3 January 2020.

Entity A transferred goods with an invoice price of $98,000,000 to the customer on 31 January 2020. The customer agreed to settle the outstanding amount by two payments, i.e. 40% and 60% of the outstanding amount on 18 February 2020 and 31 March 2020 respectively.

REQUIRED:

Provide journal entries for Entity A from 1 January 2020 to 31 March 2020 in accordance with relevant accounting standards.

ACCOUNT NAMES FOR INPUT:

| Plant | Machine | Motor van | Equipment | Land | Building | Inventory | Intangible assets |

| Bank | Payable | Receivable | Other income | Other expense | Interest expense | Interest revenue |

| Depreciation | Accum. depreciation | Impairment loss | Reversal of impairment loss | Goodwill |

| Loss on disposal | Gain on disposal | Restoration liability | Revaluation surplus | Revaluation deficit |

| Asset for product to be returned | Commission expense | Commission revenue | Revenue |

| Cost of sales | Refund liability | Contract asset | Contract liability | Retained earnings | No entry |

ANSWERS:

Journal Entries:

(I WILL LEAVE YOU A GREAT REVIEW!) Daisy D. Corporation has the following stockholders' equity on December 10, 2020:

On December 10, the market price of Daisy D. Corporation's common stock was $102 per share.

Required:

Part A: Give the general journal entry(s) required (if any) on December 10, 18, and 31 to record the following transactions in Workpaper #4.

1. On December 10, 2020, Daisy D. declared a $2 per share cash dividend, payable on December 31, to shareholders of record on December 18.
2. On December 10, 2020, Daisy D. declared a 7% stock dividend, distributable on December 31 to shareholders of record on December 18.
3. On December 10, 2020, Daisy D. declared a 200% stock dividend, distributable on December 31 to shareholders of record on December 18.
4. On December 10, 2020, Daisy D. declared a 5 for 1 stock split effective December 31, 2020.

Part B: For each transaction in part A, indicate the balances of the stockholders' equity accounts and other stockholders' equity information on December 31, 2020, assuming no other stockholders' equity transactions occurred. Treat each case independently--compute the new balances of each case based on the Current Balances.

Part C: If you are a shareholder in D. Daisy Corporation with 1,000 shares of stock, describe the effect that each transaction in Part A would have on you.

1. $2 per share cash dividend
2. 7% stock dividend
3. 200% stock dividend
4. 5 for 1 Stock Split.

Accounting Cycle Review 11-01 a,b, c1-c3

Morgan Company’s balance sheet at December 31, 2019, is presented below.

During January 2020, the following transactions occurred. (Morgan Company uses the perpetual inventory system.)

Adjustment data:

1. Prepare an adjusted trial balance at January 31, 2020. (Round answers to 0 decimal places, e.g. 5,275.)
2. Prepare an income statement. (Round answers to 0 decimal places, e.g. 5,275.)

3. Prepare an owner’s equity statement for the month ending January 31, 2020. (Round answers to 0 decimal places, e.g. 5,275.)
4. Prepare a classified balance sheet as of January 31, 2020. (List current assets in order of liquidity. Round answers to 0 decimal places, e.g. 5,275.)

fORD sells cars and have the following product lines – Sedans, Sports Utilities Vehicles (SUV) and Family Vans. For its January 2020 operations, the following were made available for management analysis.

Sedan SUVs Family Vans

Selling Price ¥1,000,000 ¥2,000,000 ¥2,200,000

Variable Manufacturing Costs per unit 400,000 900,000 1,100,000

Sales Volume (units) 150 200 50

Fixed manufacturing overhead costs total ¥275,000,000 and fixed administrative expenses total ¥25,000,000. FORD gives a 5% commission on sales (variable selling expense to its car sales people).

1. Compute the Weighted Contribution Margin per unit.

2. Compute the Weighted Contribution Margin ratio.

3. Break-even point in total units.

4. Break-even point in total sales (¥)

5. Net operating income (loss) under Variable Costing Method

6. Target sales in total ¥ to earn ¥100,000.

7. Following no.6 question above, how much should SUVs business segment contribute to sales? Problem 2

8. Cost Volume Profit Analysis. Assume that actual sales volume of FORD (Problem 1) for February 2020 were as follows: Sedan 200; SUVs 140, Family Van 50. Assuming there is no change in selling price and the cost structure (variable and fixed), compute the net operating income under variable costing method.

9. The marketing manager believes that financial performance for March 2020 could be improved with his proposal of 12% selling price increase with a corresponding 10% decrease in volume across all products lines. Compute the projected net operating income for March 2020 using figures from February 2020.

10. Following question number 9 , compute the break-even point in units under this scenario.

11. Thinking that customers are price sensitive, management is considering to decrease the selling price by 10% in the hope of a 10% increase in sales volume. Assume this scenario is independent of the marketing manager’s proposal and base your March 2020 computations on the February 2020 results (see no. 8).

12. Following question number 11, compute the break-even point in total sales (¥).