Alexandria Company uses a standard costing system. At the beginning of the 2020 financial year Alexandria adopted the following standards:

Alexandria’s July 2019 budget was based on the denominator volume of 40,000 direct labour hours. Alexandria’s actual July production was 7,800 units. The records for July indicated the following:

The company’s policy is to record materials variances at the time materials are purchased.

Required

1. Compute all possible variances from the case facts for the month of July. Label each variance calculated and indicate whether each variance is favourable (F) or unfavourable (U).
2. Maggie is rushing to prepare for her ACFI2003 final exam. She cannot understand why variable overhead has an efficiency variance, but fixed overhead does not. She is puzzled why fixed overhead has a volume variance and variable overhead does not. She reasoned that, “After all, overhead is overhead. So fixed and variable overhead should have the same type of variances”. Do you agree with Maggie? Explain in full why you agree or disagree

On July 1, 2020, a company borrows $500,000 under a long-term loan. The $500,000 will be paid back in five annual instalments of $100,000 each, starting on June 30, 2021. What will be the company's long-term loan balance, shown in the long-term liability section of its statement of financial position, at December 31, 2021?

a)$400,000.

b)$350,000.

c)$300,000.

d)Cannot tell, as the interest rate on the loan has not been provided

Alexandria Company uses a standard costing system. At the beginning of the 2020 financial year Alexandria adopted the following standards:

Alexandria’s July 2019 budget was based on the denominator volume of 40,000 direct labour hours. Alexandria’s actual July production was 7,800 units. The records for July indicated the following:

The company’s policy is to record materials variances at the time materials are purchased.

Required

1. Compute all possible variances from the case facts for the month of July. Label each variance calculated and indicate whether each variance is favourable (F) or unfavourable (U).
2. Maggie is rushing to prepare for her ACFI2003 final exam. She cannot understand why variable overhead has an efficiency variance, but fixed overhead does not. She is puzzled why fixed overhead has a volume variance and variable overhead does not. She reasoned that, “After all, overhead is overhead. So fixed and variable overhead should have the same type of variances”. Do you agree with Maggie? Explain in full why you agree or disagree.

During 2020, Sage Company started a construction job with a contract price of $1,620,000. The job was completed in 2022. The following information is available. 2020 2021 2022 Costs incurred to date $444,400 $867,420 $1,060,000 Estimated costs to complete 565,600 230,580 –0– Billings to date 301,000 904,000 1,620,000 Collections to date 272,000 814,000 1,411,000 Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. Gross profit recognized in 2020 $enter a dollar amount 1060000 Gross profit recognized in 2021 $enter a dollar amount Gross profit recognized in 2022 $enter a dollar amount SHOW LIST OF ACCOUNTS Prepare all necessary journal entries for 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. For costs incurred use account Materials, Cash, Payables.) Account Titles and Explanation Debit Credit enter an account title to record cost of construction enter a debit amount enter a credit amount enter an account title to record cost of construction enter a debit amount enter a credit amount (To record cost of construction.) enter an account title to record progress billings enter a debit amount enter a credit amount enter an account title to record progress billings enter a debit amount enter a credit amount (To record progress billings.) enter an account title to record collections enter a debit amount enter a credit amount enter an account title to record collections enter a debit amount enter a credit amount (To record collections.) enter an account title to recognize revenue enter a debit amount enter a credit amount enter an account title to recognize revenue enter a debit amount enter a credit amount enter an account title to recognize revenue enter a debit amount enter a credit amount (To recognize revenue.) SHOW LIST OF ACCOUNTS Compute the amount of gross profit to be recognized each year, assuming the completed-contract method is used. 2020 2021 2022 Gross profit $enter a dollar amount $enter a dollar amount

The following information was gathered for Zeba Company for the year ended December 31, 2020:

Assume that the cost-allocation base is direct labor-hours.

The journal entry to write off over-/under-allocated overhead at year end is:

Group of answer choices

DR Manufacturing overhead allocated                   $660,000

                              CR Cost of Goods Sold $ 60,000

                              CR Manufacturing overhead control (actual)                      $600,000

DR Manufacturing overhead allocated                   $550,000

DR Cost of Goods Sold $ 50,000

                              CR Manufacturing overhead control (actual)                      $600,000

DR Manufacturing overhead allocated $600,000

                              CR Cost of Goods Sold $ 50,000                           

CR Manufacturing overhead control (actual) $550,000

DR Manufacturing overhead allocated                   $500,000

DR Cost of Goods Sold $100,000

                              CR Manufacturing overhead control (actual)                      $600,000

Sunland Incorporated leases a piece of machinery to Culver Company on January 1, 2020, under the following terms.

Click here to view factor tables.

Evaluate the criteria for classification of the lease, and describe the nature of the lease.

For the lessee, it is a _________________ , and for the lessor, it is a ___________________.   

Prepare the journal entries for Culver for the year 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 5,275.)

Prepare the journal entries for Sunland for the year 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 5,275.)

Evaluate the criteria for classification of the lease, and describe the nature of the lease, assuming that Culver did not guarantee any amount of the expected residual value.

For the lessee, it is a __________________ , and for the lessor, it is a _____________________.

Suppose Culver did not guarantee any amount of the expected residual value. Prepare the journal entries for Culver for the year 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 5,275.)

Suppose Culver did not guarantee any amount of the expected residual value. Prepare the journal entries for Sunland for the year 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 5,275.)

Flint Company has the following securities in its portfolio on December 31, 2020. None of these investments are accounted for under the equity method.

All of the securities were purchased in 2020.
In 2021, Flint completed the following securities transactions.

Flint’s portfolio of equity securities appeared as follows on December 31, 2021.

Prepare the general journal entries for Flint Company for:

(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

B1 - Snow Company started operations on February 1, 2020 by depositing $3,000,000 cash in the bank as capital. The following transactions took place during the first month of operations:

February 3: Purchased supplies for $22,500 in cash.

February 9: Purchased equipment for $255,000, paid $105,000 in cash and the remaining amount will be paid after 10 days.

February 12: Received a bill from Dubai News for advertising amounted to $1,650.

February 14: Paid $24,000 salaries in cash.

February 16: Paid $6,000 utilities expense in cash.

February 17: Provided services to customers for $195,000 in cash.

February 19: Paid $150,000 for equipment purchased on February 9.

February 28: The owner withdrew $7,500 cash for personal use.

Required:

1. Prepare journal entries to record the above transactions.
2. Post to the appropriate ledger accounts.

The Task Company is beginning operations in May 2020. They have budgeted May sales of $34,000, June sales of $40,000, July sales of $42,000, and August sales of $38,000. 10% of each month's sales will represent cash sales; 75% of the balance will be collected in the month following the sale, 17% the second month, 6% the third month, and the balance is bad debts.

What is the amount of cash to be collected in the month of August?

Select one:

a. $ 35,946

b. $ 43,740

c. $ 40,106

d. $ 39,746

A company takes a short position in 10 futures contracts on soybean on October 2, 2020. The initial futures price is $10.175 per bushel. Suppose on December 31, 2020 the futures price is $10.02 per bushel. On March 20, 2021 it is $9.89 per bushel. The contracts are closed out on March 20, 2021. What gain is recognized (taxable) in the accounting year January 1 to December 31, 2021 if the company is classified as a hedger? Each contract is on 5,000 bushels of soybean.

A company takes a long position in 5 futures contracts on soybean on October 2, 2020. The initial futures price is $10.19 per bushel. Suppose on December 31, 2020 the futures price is $10.25 per bushel. On March 20, 2021 it is $10.42 per bushel. The contracts are closed out on March 20, 2021. What gain is recognized (taxable) in the accounting year January 1 to December 31, 2021 if the company is classified as a speculator? Each contract is on 5,000 bushels of soybean.

Luby’s Inc. has derivatives transactions with four different counterparties A, B, C, D which are worth $8 million, -$17 million, $20 million and -$32 million, respectively to Lucy’s. The transactions are cleared centrally through the same CCP and the CCP requires a total initial margin of $10 million. How much margin or collateral does Luby’s have to provide?

Suppose a trader who owns 320,000 pounds of commodity A decides to hedge the value of her position with the futures contracts. One futures contract is for the delivery of 40,000 pounds of commodity B. The price of commodity A is $21.20 and the futures price is 18.30 (both dollars per pound). The correlation between the futures price and the price of commodity A is 0.92. The volatilities of commodity A and the futures are 0.31 and 0.38 per year, respectively. What is the minimum variance hedge ratio?

Suppose a trader who owns 320,000 pounds of commodity A decides to hedge the value of her position with the futures contracts. One futures contract is for the delivery of 40,000 pounds of commodity B. The price of commodity A is $21.20 and the futures price is 18.30 (both dollars per pound). The correlation between the futures price and the price of commodity A is 0.92. The volatilities of commodity A and the futures are 0.31 and 0.38 per year, respectively. Should the trader take a long or short futures position?