| Gulf Shipping Company Income Statement January 1 to December 31, 2018 (amounts in thousands) |
|
|---|---|
| Revenue | 9,000 |
| Cost of Goods Sold (COGS) | 3,600 |
| Gross Income | 5,400 |
| Sales, General, & Administrative Expenses (SG&A) | 900 |
| Depreciation Expense | 1,000 |
| Other Expenses | 400 |
| Earnings Before Interest & Taxes (EBIT) | 3,100 |
| Interest | 120 |
| Pre-Tax Income | 2,980 |
| Income Taxes | 1,192 |
| Net Income | 1,788 |
Between January 1 and December 31, 2018:
1. Accounts Receivable decrease by $200,000
2. Accounts Payable increase by $500,000
3. Gross Property, Plant, & Equipment increase by
$8,500,000
4. Long Term Debt increases by $900,000
Assume no other changes
What is the Net Cash Flow?
In: Accounting
The customer billing and collection functions of the ThanksMe Company, a small paint manufacturer, are attended to by a receptionist, an accounts receivable clerk, and a cashier who also serves as a secretary. The company’s paint products are sold to wholesalers and retail stores.
The following describes all the procedures performed by the employees of the ThanksMe Company regarding customer billings and collections:
1. The mail is opened by the receptionist, who gives the customers’ purchase orders to the accounts receivable clerk. Fifteen to twenty orders are received each day. Under instructions to expedite the shipment of orders, the accounts receivable clerk at once prepares a five-copy sales invoice form, which is distributed as follows:
a) Copy 1 is the customer billing copy and is held by the accounts receivable clerk until notice of shipment is received.
b) Copy 2 is the accounts receivable department copy and is held for the ultimate posting of the accounts receivable records.
c) Copies 3 and 4 are sent to the shipping department.
d) Copy 5 is sent to the storeroom as authority for release of the goods to the shipping department.
2. After the paint order has been moved from the storeroom to the shipping department, the shipping department prepares the bill of lading and labels the cartons. Sales Invoice Copy 4 is inserted in the carton as a packing slip. After the trucker has picked up the shipment, the customer’s copy of the bill of lading and Copy 3, on which any undershipments are noted, are returned to the accounts receivable clerk. The company does not back order in the event of undershipments; customers are expected to reorder the merchandise. The company’s copy of the bill of lading is filed by the shipping department.
3. When Copy 3 and the customer’s copy of the bill of lading are received by the accounts receivable clerk, Copies 1 and 2 are completed by numbering them and inserting quantities shipped unit prices, extensions, discounts, and totals. The accounts receivable clerk then mails Copy 1 and the copy of the bill of lading to the customer. Copies 2 and 3 are stapled together.
4. The individual accounts receivable ledger cards are posted by the accounts receivable clerk using a one-write system, whereby the sales register is prepared as a carbon copy of the postings. Postings are made from Copy 2, which is then filed, along with staple-attached Copy 3, in numerical order. Monthly, the general ledger clerk summarizes the sales register for posting to the general ledger accounts.
5. Since the ThanksMe Company is short of cash, the deposit of receipts is also expedited. The receptionist turns over all mail receipts and related correspondence to the accounts receivable clerk, who examines the checks and determines that the accompanying vouchers or correspondence contain enough detail to permit the posting of the accounts. The accounts receivable clerk then endorses the checks and gives them to the cashier, who prepares the daily deposit. No currency is received in the mail, and no paint is sold over the counter at the factory.
6. The accounts receivable clerk uses the vouchers or correspondence that accompanied the checks to post the accounts receivable ledger cards. The one-write system prepares the cash receipts register as a carbon copy of the postings. Monthly, the general ledger clerk summarizes the cash receipts register for posting to the general ledger accounts. The accounts receivable clerk also corresponds with customers about unauthorized deductions for discounts, freight or advertising allowances, returns, and so on and prepares the appropriate credit memos. Disputed items of large amounts are turned over to the sales manager for settlement. Each month the accounts receivable clerk prepares a trial balance of the open accounts receivable and compares the resulting total with the general ledger control account for accounts receivable.
Required:
I) Identify four (4) internal control weaknesses in the ThanksMe Company’s procedures related to customer billings and remittances and the accounting for these transactions.
II) For each weakness, identify one (1) error or irregularity that could result.
III) For each weakness, list one (1) substantive audit procedure for testing the significance of the potential error.
In: Accounting
| II. Ending June 30 records for June 30 for ABC Company | |||||||
| Revenue | 1,600,000 | ||||||
| Raw Materials Purchased in Month | 150,000 | ||||||
| Direct Labor Cost | 55,000 | ||||||
| Advertising Expense | 25,000 | ||||||
| Rent on Factory | 42,000 | ||||||
| Sales Commissions | 70,000 | ||||||
| Maintenance Expense on factory Equip. | 22,000 | ||||||
| Supplies for the Factory | 3,500 | ||||||
| Depreciation on Factory Equipment | 35,000 | ||||||
| Indirect labor Cost | 50,600 | ||||||
| Utilities Expense for Factory | 12,000 | ||||||
| Depreciation on Sales Office Cars | 22,000 | ||||||
| Raw Matl | WIP | Finished Goods | |||||
| Beginning Inventory | 12,000 | 15,000 | 35,000 | ||||
| Ending Inventory | 8,000 | 20,000 | 40,000 | ||||
| Prepare the Cost of Goods Manufactured and Cost of goods sold for the month below | |||||||
| Create an Income Statement for the month (Simple format, include period costs) | |||||||
In: Accounting
P4.1B: Karlin Company Information for 2020.
Retained earnings , January 1, 2020 2,250,000
Sales revenue 53,000,000
Cost of goods sold 33,000,000
Interest revenue 120,000
Selling and administrative expenses 8,900,000
Write-off of goodwill 2,100,000
Income taxes for 2020 3,650,000
Loss on the sale of investments 53,000
Loss due to hurricane damage 1,100,000
Gain on the disposition of the retail division (net of tax) 23,000
Loss on operations of the retail division (net of tax) 231,000
Dividends declared on common stock 350,000
Dividends declared on preferred stock 125,000
INSTRUCTIONS:1. Prepare a multiple-step income statement 2. Prepare a separate Retained Earnings StatementOn September 15, Karlin sold the retail operations to Shark CorpAssume that 60,000 shares of common stock are outstanding.
In: Accounting
Presented below are three independent situations.
1. Ivanhoe Stamp Company records stamp service
revenue and provides for the cost of redemptions in the year stamps
are sold to licensees. Ivanhoe’s past experience indicates that
only 80% of the stamps sold to licensees will be redeemed.
Ivanhoe’s liability for stamp redemptions was $13,180,300 at
December 31, 2019. Additional information for 2020 is as
follows.
| Stamp service revenue from stamps sold to licensees | $10,060,100 | |
| Cost of redemptions (stamps sold prior to 1/1/20) | 5,935,600 |
If all the stamps sold in 2020 were presented for redemption in
2021, the redemption cost would be $5,191,300. What amount should
Ivanhoe report as a liability for stamp redemptions at December 31,
2020?
| Liability for stamp redemptions at December 31, 2020 | $ ???????????????? |
2. In packages of its products, Shamrock Inc.
includes coupons that may be presented at retail stores to obtain
discounts on other Shamrock products. Retailers are reimbursed for
the face amount of coupons redeemed plus 10% of that amount for
handling costs. Shamrock honors requests for coupon redemption by
retailers up to 3 months after the consumer expiration date.
Shamrock estimates that 60% of all coupons issued will ultimately
be redeemed. Information relating to coupons issued by Shamrock
during 2020 is as follows.
| Consumer expiration date | 12/31/20 | |
| Total face amount of coupons issued | $744,400 | |
| Total payments to retailers as of 12/31/20 | 320,560 |
What amount should Shamrock report as a liability for unredeemed
coupons at December 31, 2020?
| Liability for unredeemed coupons | $???????????????????? |
3. Bridgeport Company sold 692,300 boxes of pie
mix under a new sales promotional program. Each box contains one
coupon, which submitted with $4.50, entitles the customer to a
baking pan. Bridgeport pays $6.50 per pan and $1.00 for handling
and shipping. Bridgeport estimates that 70% of the coupons will be
redeemed, even though only 244,200 coupons had been processed
during 2020. What amount should Bridgeport report as a liability
for unredeemed coupons at December 31, 2020?
| Liability for unredeemed coupons at December 31, 2020 | $ ?????????????????/ |
In: Accounting
Royal Lawncare Company produces and sells two packaged products—Weedban and Greengrow. Revenue and cost information relating to the products follow:
|
Product |
||||
| Weedban | Greengrow | |||
| Selling price per unit | $ | 9.00 | $ | 33.00 |
| Variable expenses per unit | $ | 2.70 | $ | 14.00 |
| Traceable fixed expenses per year | $ | 135,000 | $ | 34,000 |
Common fixed expenses in the company total $96,000 annually. Last year the company produced and sold 35,500 units of Weedban and 21,500 units of Greengrow.
Required:
Prepare a contribution format income statement segmented by product lines.
In: Accounting
Question 1 : Company has 4 revenue options.
Option A: initial cost of $300,000, annual savings of $65,000,
salvage of $150,000, useful life of 6 years
Option B: initial cost of $495,000, annual savings of $80,000, an
additional one-time saving of $150,000 in year 3, salvage of
$250,000, useful life of 4 years
Option C: initial cost of $350,000, annual savings of $100,000,
salvage of $200,000, useful life of 3 years
Option D: initial cost of $400,000, annual savings of $100,000,
salvage of $300,000, useful life of 2 years
a) If the options are independent and MARR is 15%, which should be
selected? Justify answer using ROR.
b) If the options are mutually exclusive and MARR is 15%, which
should be selected? Just answer using ROR.
c) If MARR is 20%, which should be selected if they are independent
options?
d) If MARR is 20%, which should be selected if they are mutually
exclusive?
In: Finance
Royal Lawncare Company produces and sells two packaged products—Weedban and Greengrow. Revenue and cost information relating to the products follow:
|
Product |
||||
| Weedban | Greengrow | |||
| Selling price per unit | $ | 12.00 | $ | 33.00 |
| Variable expenses per unit | $ | 2.60 | $ | 10.00 |
| Traceable fixed expenses per year | $ | 131,000 | $ | 47,000 |
Common fixed expenses in the company total $103,000 annually. Last year the company produced and sold 38,500 units of Weedban and 23,000 units of Greengrow.
Required:
Prepare a contribution format income statement segmented by product lines.
In: Accounting
Royal Lawncare Company produces and sells two packaged products—Weedban and Greengrow. Revenue and cost information relating to the products follow:
Product
Weedban Greengrow
Selling price per unit $8.00 $30.00
Variable expenses per unit $2.80 $13.00
Traceable fixed expenses per year $128,000 $35,000
Last year the company produced and sold 35,500 units of Weedban and 19,500 units of Greengrow. Its annual common fixed expenses are $96,000.
Required:
Prepare a contribution format income statement segmented by product lines.
In: Accounting
Gunst Company produces three video games: Android, Bio-Mutant, and Cyclops. Cost and revenue data pertaining to each product are as follows.
Android Bio-Mutant Cyclops
Selling price $100 $65 $125
Direct labor 48 24 60
Direct materials 9 8 16
Variable overhead 7 4 9
At the present time, demand for each of the company's products far exceeds its capacity to produce them. Thus, management is trying to determine which of its games to concentrate on next week in filling its backlog of orders. Gunst's direct labor rate is $12 per hour, and only 1,000 hours of direct labor are available each week.
Determine the maximum total contribution margin the company can make by its best use of the 1,000 available hours. (Do not round intermediate calculations.)
Total contribution Margin ________________?
In: Accounting