The Burger Division of Good Meat Company reported the following results for 2020: Sales $800,000 Variable costs 420,000 Controllable fixed costs 100,000 Average operating assets 4,000,000 Management is considering the following independent alternative courses of action in 2021 in order to maximize the return on investment for the division 1. Reduce controllable fixed costs by 50% with no change in sales or variable costs 2 Reduce average operating assets by 30% with no change in control margin 3. Increase sales $200,000 with no change in the contribution margin percentage Required a) Calculate the return on investment for 2020 b) Calculate the expected return on investment for each of the alternative courses of action Show all your work
In: Accounting
The December 31, 2020 inventory of Ivanhoe Company consisted of
four products, for which certain information is provided
below.
| Product | Original Cost | Replacement Cost |
Estimated Disposal Cost |
Expected Selling Price |
Normal Profit on Sales |
||||||||||
| A | $29.00 | $27.00 | $5.50 | $42.00 | 25.00% | ||||||||||
| B | $41.00 | $39.00 | $9.00 | $49.00 | 20.00% | ||||||||||
| C | $148.00 | $143.00 | $22.00 | $185.00 | 20.00% | ||||||||||
| D | $20.00 | $14.70 | $5.00 | $26.00 | 20.00% | ||||||||||
Using the lower-of-cost-or-market approach applied on an
individual-item basis, compute the inventory valuation that should
be reported for each product on December 31, 2020.
(Round answers to 2 decimal places, e.g.
52.75.)
| Product | ||
| A | $ | |
| B | $ | |
| C | $ | |
| D | $ |
In: Accounting
MSK Construction Company contracted to construct a factory building for $525,000. Construction started during 2019 and was completed in 2020. Information relating to the contract follows:
| 2019 | 2020 | ||||||
| Costs incurred during the year | $ | 290,000 | $ | 150,000 | |||
| Estimated additional cost to complete | 145,000 | — | |||||
| Billings during the year | 260,000 | 265,000 | |||||
| Cash collections during the year | 240,000 | 285,000 | |||||
Required:
Record the preceding transactions in MSK’s books assuming it recognizes revenue over time and uses costs incurred to measure the extent to which its performance obligation has been satisfied.
Record the preceding transactions in MSK’s books assuming it recognizes revenue at a point in time when control of the completed factory is transferred to the customer at the end of the project.
In: Accounting
Mr Ahmed Kumar runs a snack distribution business located in the Light Industrial area in Lusaka. The following list of balances was extracted from his ledger as at 31 March, 2020; the end of his most recent financial year.
K
Capital 83,887
Sales 259,870
Trade accounts payable 19,840
Returns outwards 13,407
Allowance for doubtful debts 512
Discounts allowed 2,306
Discounts received 1,750
Purchases 135,680
Returns inwards 5,624
Carriage outwards 4,562
Drawings 18,440
Carriage inwards 11,830
Rent, rates and insurance 25,973
Heating and lighting 11,010
Postage, stationery and telephone 2,410
Advertising 5,980
Salaries and wages 38,521
Bad debts 2,008
Cash in hand 534
Cash at bank 4,440
Inventory as at 1st April 2019 15,654
Trade accounts receivable 24,500
Fixtures and fittings - at cost 120,740
Prov. for depreciation on fixtures and fittings – 31/03/2020 63,020
Depreciation 12,074
The following additional information as at 31st March, 2020 is available:
(a) Inventory at the close of business was valued at K17,750
(b) Insurances have been prepaid by K1,120
(c) Heating and lighting is accrued by K1,360
(d) Rates have been prepaid by K5,435
(e) The allowance for doubtful debts is to be adjusted so that it is 3% of trade accounts receivable.
Required:
For the year 2020, prepare Mr Kumar’s:
[10 Marks]
[10 Marks]
[10 Marks]
[10 Marks]
[Total: 40 Marks]
In: Accounting
The following information is available about Ancora Co. (Ancora): 1. Ancora's cash balance on December 31, 2019, was $70,000. 2. Actual sales for November and December 2019, and expected sales for January and February 2020, are as follows: November 2019 December 2019 January 2020 February 2020 (actual) (actual) (estimate) (estimate) Cash sales $ 75,000 $ 90,000 $ 60,000 $ 50,000 Credit sales 560.000 650,000 480,000 430,000 Sales on account are collected over a three-month period at the following rate: 30% collected in the month of sale, 50% collected in the month following sale and 17% collected in the second month following sale. The remaining 3% is uncollectable and is written off 3. Ancora's gross profit on sales is 35%. 4. Ancora's policy is to hold inventory at the end of the month equal to 40% of next month's budgeted sales. Inventory purchases in a given month are paid for as follows: 30% are paid in the month of purchase and 70% in the month following 5. Selling and administrative expenses are budgeted at $400,000 for January 2020. This amount includes $120,000 for depreciation 6 Equipment costing $150 000 was expected to be purchased for cash during January 2020 7 On December 15, 2019. Ancora declared a $100.000 dividend to be paid on January 15, 2020 8 Ancora must maintain a minimum cash balance of $50.000 An open line of credit is available from Ancora's bank. REQUIRED: Prepare Ancora's cash budget for the month of Jan 2020 and calculate Ancora's budgeted account receivable and accts payable closing balance at Jan 31, 20.
PLEASE PROVIDE TYPE WRITTEN ANSWER AND NOT HAND-WRITTEN SINCE IT'S HARD TO UNDERSTAND HAND WRITING.
In: Accounting
Mr Ahmed Kumar runs a snack distribution business located in the Light Industrial area in Lusaka. The following list of balances was extracted from his ledger as at 31 March, 2020; the end of his most recent financial year.
K
Capital 83,887
Sales 259,870
Trade accounts payable 19,840
Returns outwards 13,407
Allowance for doubtful debts 512
Discounts allowed 2,306
Discounts received 1,750
Purchases 135,680
Returns inwards 5,624
Carriage outwards 4,562
Drawings 18,440
Carriage inwards 11,830
Rent, rates and insurance 25,973
Heating and lighting 11,010
Postage, stationery and telephone 2,410
Advertising 5,980
Salaries and wages 38,521
Bad debts 2,008
Cash in hand 534
Cash at bank 4,440
Inventory as at 1st April 2019 15,654
Trade accounts receivable 24,500
Fixtures and fittings - at cost 120,740
Prov. for depreciation on fixtures and fittings – 31/03/2020 63,020
Depreciation 12,074
The following additional information as at 31st March, 2020 is available:
(a) Inventory at the close of business was valued at K17,750
(b) Insurances have been prepaid by K1,120
(c) Heating and lighting is accrued by K1,360
(d) Rates have been prepaid by K5,435
(e) The allowance for doubtful debts is to be adjusted so that it is 3% of trade accounts receivable.
Required:
For the year 2020, prepare Mr Kumar’s:
[10 Marks]
[10 Marks]
[10 Marks]
[10 Marks]
[Total: 40 Marks]
In: Accounting
Little Company borrowed $56,000 from Sockets on January 1, 2018, and signed a three-year, 7% installment note to be paid in three equal payments at the end of each year. The present value of an ordinary annuity of $1 for 3 periods at 7% is 2.62432. Required: 1. Prepare the journal entry on January 1, 2018, for Sockets’ lending the funds. 2. Calculate the amount of one installment payment. 3. Prepare an amortization schedule for the three-year term of the installment note. 4. Prepare the journal entry for Sockets’ first installment payment received on December 31, 2018. 5. Prepare the journal entry for Sockets’ third installment payment received on December 31, 2020.
In: Accounting
The following items are taken from the financial statements of Super Company for 2019:
Cash 26,000
Common Stock 25,000
Cost of Goods Sold 17,000
Depreciation Expense 4,800
Dividends 5,300
Equipment 44,000
Interest Expense 2,500
Rent Expense 2,000
Patents 7,500
Note Payable (Due 2020) 3,000
Retained Earnings, January 1 16,000
Salaries Expense 5,200
Sales Revenue 35,500
Accounts Payable 18,500
Rent Payable 2,000
Accounts Receivable 4,000
Accumulated Depreciation 4,800
Bonds Payable 18,000
Supplies 4,500
Instructions: Prepare the following statements
a) Multistep income statement
b) Retained earnings
c) Classified Balance Sheet
In: Accounting
| Merriweather Company, a publicly-held firm, is completing its 10-K report for fiscal 2020. Merriweather considers that it is involved in five separate lines of business. | |||||||||||
| The following information is available, from which Merriweather must determine which segments are reportable and what that disclosure should look like. use 10% test (what that disclosure should look like?) | |||||||||||
| Line of business | Total revenue | Operating Profit or (loss) | Identifiable assets | ||||||||
| Children's wear | 120,000,000 | 30,000,000 | 167,000,000 | ||||||||
| Women's wear | 20,000,000 | 3,000,000 | 52,000,000 | ||||||||
| Men's wear | 46,000,000 | 2,000,000 | 145,000,000 | ||||||||
| Outerwear | 18,000,000 | (1,050,000) | 45,000,000 | ||||||||
| Foot wear | 22,000,000 | (9,600,000) | 140,000,000 | ||||||||
| Total | 226,000,000 | 24,350,000 | 549,000,000 | ||||||||
In: Accounting
Q. From the following information in Trial balance prepare Trading, Profit and Loss Account and Balance Sheet of the company as on 31st December 2020.
|
Particulars |
Dr. Amount (Dhs) |
Cr. Amount (Dhs) |
|
Capital Purchases Purchase Returns Sales Sales Returns Opening Stock Cash in Hand Salaries Rent Commission received Drawings Wages General Expenses Creditors Debtors Machinery Furniture Land and Building Bank Loan |
200,000 50,000 90,000 65,000 35,000 30,000 20,000 50,000 15,000 100,000 65,000 50,000 170,000 |
300,000 10,000 310,000 20,000 145,000 155,000 |
|
940,000 |
940,000 |
Closing Stock is 320,000 dhs
Answers should be in Word version or Excel
In: Accounting