Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $110,000 and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $70,000 and was appraised at $180,000. The land was also encumbered with a $70,000 nonrecourse mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. At the end of the first year, Blue Bell made a $7,000 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information:

Required:

1. a. Compute the adjusted basis of each partner’s interest in the partnership immediately after the formation of the partnership.

2. b. List the separate items of partnership income, gains, losses, and deductions that the partners must show on their individual income tax returns that include the results of the partnership’s first year of operations.

3. d. What are the partners’ adjusted bases in their partnership interests at the end of the first year of operations?

1) Which of the following is likely to occur as the result of the law of diminishing marginal utility?

a) Petra's utility from her second apple was less than her satisfaction from her first orange.

b) Hudson enjoyed his second slice of pizza more than his first.

c) Sabine's utility from her first granola bar is greater than Rachel's utility from her second granola bar.

d) Wesley enjoyed his second bottle of iced tea less than his first bottle, other things constant.

2) A consumer's utility-maximizing combination of goods is given by the bundle that corresponds to the point on

a) the indifference curve that intersects the horizontal axis.

b) the indifference curve that intersects the vertical axis.

c) an indifference curve that is tangent to the budget constraint.

d) the budget constraint where it intersects one of the axes.

3) Which of the following is not a property of indifference curves?

a) Indifference curves never cross.

b) Indifference curves have a concave shape.

c) Indifference curves slope downward.

d) The farther away from the origin, the higher utility.

e) All of the above are properties of indifference curves.

I. Master Budget

Pedro’s Pizza makes frozen pizza dough. Thecompany just finished its first year of operation (12 months, Jan-Dec). The following is its traditional income statement and Balance Sheet

Sales (15,000 units)​   $ 300,000

CGS ​  ​180,000

Gross Profit​  ​   $ ​120,000

Sales Commissions​     $​30,000

Salaries​  ​30,000

Depreciation expense     6,000

Net Income​   $​54,000

​   Cash ​$5,000 AP $3,000

​      AR​  5,000     Credit Line 7,000

​   Inventory – Raw Mat​ 9,000

Inventory – Finished Goods 3,000   Common Stock  12,000

Equipment​60,000   Retained Earn   54,000

​   Acc Depreciation​      ( 6,000)     

Total Assets​     $76,000     Total L & Eq   $76,000

VCP wants to prepare a cash budget for the first 3 months of the next year.

Use the following estimates:

- The quantity sold is projected to increase 4% for the year. Price will increase 5%. Sales are spread evenly throughout the year.   CGS should be calculated on a FIFO basis.

- 25% of sales is collected in the month of sale; the remainder is collected the next month.

- Inventory:

o Last year’s Finished Goods and Cost of Goods Sold had a constant cost per unit.

o All raw materials is purchased on credit ($1.50per lb) and is the same price as last year. Each product requires 2.5 lbs).

o Ending inventory for both should be 40% of next month’s activity (activity is constant).

o Beginning and ending WIP is zero

- 20% of purchases are paid in the month of purchase, 80% in the following.  All other expenses are paid with cash.

- Direct Labor is 0.2 hours per product at $30 per hour. Variable Overhead is $2.25 per product. Fixed Overhead is zero.

- The credit line is used for cash shortfalls. Excess cash will pay down this line. Interest is 1% per month of last month’s balance.

- Projections are to buy $6000 of new equipment at the end of January. Equipment is depreciated straight-line to zero salvage over 5 years.  All of this is used in administration.

- Sales commission rate will remain the same. Salaries will increase by 4%.

- VCP wants to maintain a minimum cash balance of at least $5,000.  Excess to repay credit line.

f. Cost of Goods Sold/Ending Finished Goods (FIFO) (10 points)

Jan

Feb

Mar

Beg FG (units)

Cost per unit, BEG FG

Quantity produced (units)

Cost per produced unit

Quantity of Units sold

Cost of Goods Sold

Units in Ending FG

Cost of Ending FG

Cash Budget/Interest/Credit line (10 points)

Jan

Feb

Mar

Cash Beg Bal

Collections

AP Payments

Other Cash Payments:

Cash subtotal

Projected monthly Income statement for Jan, Feb, Mar (10 points)

*please help. I want to make sure I’m heading the right direction. Thank you

You are the audit manager assigned to the audit of MNO Corporation. MNO imports goods from around the world and sells the goods to small and midsize retailers. This is the first year of the audit. Andy has recently graduated and has joined your firm as a junior accountant. He has been assigned to the inventory section for the interim audit and is eager to do a good job. Andy uses the model documentation used by your firm. His notes show that MNO has thirty personnel at the warehouse in Brampton and four at the head office in midtown Toronto who work on inventory. Downtown there is a purchasing agent who works closely with the sales team to buy what retailers want to sell. The purchasing agent authorizes the orders that he enters into the computer system. A logistics specialist arranges for shipping and customs clearance, including any shipments to customers. The inventory analyst monitors sales and stock levels. She makes journal entries to write off any obsolete or slow moving inventory, oversees the annual inventory count, and reconciles the perpetual records with sales records. She has an assistant reporting to her. The assistant gets a copy of all receiving reports for incoming goods and a copy of all shipping documents for sales. He enters these into the computer system to match to purchase orders and customer sales orders, making notes of any backorders and short shipments to bring to the inventory analyst’s attention. At the warehouse, the warehouse manager supervises two receiving clerks and four shipping clerks as well as the twenty-three warehousemen. He also authorizes any write-offs for damaged goods. The warehousemen put received goods on the shelf as well as pick goods off the shelf to prepare for shipment to customers. They also look for any damaged goods that need to be written off. The clerical staff double check all counts for received or shipped and prepare the relevant reports. A copy of each report is kept for the warehouse records, a copy is sent to the assistant inventory analyst, and a third copy is sent to either accounts payable or to the invoicing clerks depending on whether the goods were received or shipped out.

Required

a) Evaluate the general and environmental controls over inventory.

b) How would you explain to Andy the difference between validity and completeness as they apply to testing inventory controls in a perpetual inventory system?

Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company’s inventory balances were as follows:

The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company’s predetermined overhead rate of $16.25 per direct labor-hour was based on a cost formula that estimated $650,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year:

1. Raw materials were purchased on account, $510,000.
2. Raw materials use in production, $480,000. All of of the raw materials were used as direct materials.
3. The following costs were accrued for employee services: direct labor, $600,000; indirect labor, $150,000; selling and administrative salaries, $240,000.
4. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $367,000.
5. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $500,000.
6. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year.
7. Jobs costing $1,680,000 to manufacture according to their job cost sheets were completed during the year.
8. Jobs were sold on account to customers during the year for a total of $2,800,000. The jobs cost $1,690,000 to manufacture according to their job cost sheets.

Q1. What is the total amount of manufacturing overhead applied to production during the year?

Q2. Record the maufactured goods completed during the year.

Q3. What is the ending balance in work in progress?

Q4. Record the cost of goods sold to the customer

Q5. What is the ending balance in finished goods?

Q6. Assuming that the company closes its underapplied or overapplied overhead to Cost of Goods Sold, what is the adjusted cost of goods sold for the year?

Q7. What is the gross margin for the year?

Q8.What is the net operating income for the year?

Q9. What is the journal entry to record raw materials used in production? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Q4. Is manufacturing overhead underapplied or overapplied for the year? By how much?

Q5. What is the cost of goods available for sale during the year?

Q6.

Vico Bank Ltd. has just been issued with a Universal Banking License (provisionally) by the Bank of Ghana (BOG) to operate business of banking in Ghana. The Bank is duly incorporated in Ghana and has fulfilled all the initial legal and regulatory requirements. However, Vico Bank Ltd. failed to meet its target for the first quarter IN 2020 due to COVID-19. The Board and Management of the Bank has decided to engage a consultant who has an in-depth knowledge, skills and understanding in treasury operations and risk management to set-up and manage the treasury department of the Bank. The Board and Management have decided to employ you as the new Treasury Manager. You have been called upon by the Board of Vico Bank Ltd. to make a detailed 12 hour presentation on how you are going to organize the treasury department. (a) Suggest five strategic ways you can help them to improve their cash management (b) Explain how you are going to implement them.

Vera Ernst is a licensed dentist. During the first month of the operation of her business, the following events and transactions occurred.

Prepare a trial balance on April 30, 2020.

Jackson Company engaged in the following investment transactions during the current year.

  
Required:
Prepare the appropriate journal entries to record the transactions for the year including year-end adjustments. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Presented below are four overhead costs of Chemtrails Mfg. Corp. for the first three quarters of 2017. Q1 Q2 Q3 Units Produced 245,700 262,900 251,800 Overhead Costs: Factory Maintenance $ 229,206 $ 239,182 $ 232,744 Indirect Labor 800,982 857,054 820,868 Factory Real Estate Taxes 25,100 25,100 25,100 Indirect Materials 535,626 573,122 548,924 Total Overhead Costs $ 1,590,914 $ 1,694,458 $ 1,627,636 a) Analyze the data to determine the behavior of each cost. Indicate whether each cost is a variable cost, fixed cost, or mixed cost by writing an “X” in the corresponding box in the table below. (1 point per cost = 4 points) Variable Fixed Mixed Factory Maintenance Indirect Labor Factory Real Estate Taxes Indirect Materials. The Analyze the data to determine the cost function for each cost (2 points per cost = 8 points). Finally, Complete the following table for the fourth quarter of 2017. (2 points