Scherer Company provided the following income statements for its first 3 years of operation:

X

Labels and Amount Descriptions

Refer to the list below for the exact wording of an account title within your income statement.

The US Federal Reserve Bank (FED) is considering tightening the money supply now. The United States has an open macro-economy including exports and imports, a market for foreign currency (exchange rates are the price in this market), and international capital mobility. If the FED does restrict the money supply, it will affect investment as it would in a closed economy. But now, adjustments in the foreign currency market occur that induce further changes in aggregate Supply and Demand.

Summarize the majority market adjustments to the new monetary policy. First, explain how a change in the money supply affects aggregate demand(and why). Then explain the second level effects on exchange rates, and the market for goods and services (aggregate supply and demand). Use three supply/demand diagrams, one for the money market, one for the goods and services market, and one for the foreign currency market.

Compared to the closed economy we studied earlier in the semester, are the effects of a change in the money supply larger or smaller when the economy is open (Has trade and floating exchange rates)?

Moonbeam Company manufactures toasters. For the first 8 months of 2020, the company reported the following operating results while operating at 75% of plant capacity:

Cost of goods sold was 70% variable and 30% fixed; operating expenses were 80% variable and 20% fixed.

In September, Moonbeam receives a special order for 23,100 toasters at $7.85 each from Luna Company of Ciudad Juarez. Acceptance of the order would result in an additional $3,100 of shipping costs but no increase in fixed costs.

(a)

Prepare an incremental analysis for the special order. (Round computations for per unit cost to 2 decimal places, e.g. 15.25 and all other computations and final answers to the nearest whole dollar, e.g. 5,725. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Sunset Products manufactures skateboards. The following transactions occurred in March:

Purchased $22,000 of materials on account.

Issued $1,200 of supplies from the materials inventory.

Purchased $25,400 of materials on account.

Paid for the materials purchased in transaction (1) using cash.

Issued $30,400 in direct materials to the production department.

Incurred direct labor costs of $27,000, which were credited to Wages Payable.

Paid $21,900 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing shop.

Applied overhead on the basis of 125 percent of direct labor costs.

Recognized depreciation on manufacturing property, plant, and equipment of $5,400.

The following balances appeared in the accounts of Sunset Products for March:

Required:

a. Prepare journal entries to record the transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Bayas Corporation uses process costing. A number of transactions that occurred in June are listed below.

1. (1) Raw materials that cost $40,900 are withdrawn from the storeroom for use in the Mixing Department. All of these raw materials are classified as direct materials.

2. (2) Direct labor costs of $17,200 are incurred, but not yet paid, in the Mixing Department.

3. (3) Manufacturing overhead of $46,800 is applied in the Mixing Department using the department’s predetermined overhead rate.

4. (4) Units with a carrying cost of $88,700 finish processing in the Mixing Department and are transferred to the Drying Department for further processing.

5. (5) Units with a carrying cost of $112,400 finish processing in the Drying Department, the final step in the production process, and are transferred to the finished goods warehouse.

6. (6) Finished goods with a carrying cost of $99,300 are sold.

Required:

Prepare journal entries for each of the transactions listed above. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet 1-6

You are the owner of a very small business that sells gourmet coffee.

You sell only one product, a 12-ounce bag of whole-bean French roast coffee. You sell each bag of coffee for $14 each, but due to the fluctuation in commodity prices, the price you pay your supplier to stock the product is constantly changing. In your first month of operations, you bought bags of coffee from your supplier in the following order: (a) 1 units at $2 each on January 1, (b) 7 units at $4 each on January 8, and (c) 2 units at $8 each on January 29.

Assuming you sold 6 units during the month, calculate the cost of goods available for sale, ending inventory, and cost of goods sold under the (a) FIFO, (b) LIFO, and (c) weighted average cost flow assumptions. Assume a periodic inventory system is used. (Round "Cost per Unit" to 2 decimal places.)

Aspen Company estimates its manufacturing overhead to be $631,250 and its direct labor costs to be $505,000 for year 2. Aspen worked on three jobs for the year. Job 2-1, which was sold during year 2, had actual direct labor costs of $195,600. Job 2-2, which was completed, but not sold at the end of the year, had actual direct labor costs of $326,000. Job 2-3, which is still in work-in-process inventory, had actual direct labor costs of $130,400. Actual manufacturing overhead for year 2 was $801,900. Manufacturing overhead is applied on the basis of direct labor costs.

Required:

Prepare an entry to allocate over- or underapplied overhead to Work in Process, Finished Goods and Cost of Goods Sold. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

• Record the allocation of over- or underapplied overhead.

Note: Enter debits before credits.

Problem 23-5A

The budget committee of Suppar Company collects the following data for its San Miguel Store in preparing budgeted income statements for May and June 2017.

1. Sales for May are expected to be $803,000. Sales in June and July are expected to be 5% higher than the preceding month.
2. Cost of goods sold is expected to be 75% of sales.
3. Company policy is to maintain ending merchandise inventory at 10% of the following month’s cost of goods sold.
4. Operating expenses are estimated to be as follows:

Sales salaries $30,000 per month
Advertising 6 % of monthly sales
Delivery expense 2 % of monthly sales
Sales commissions 5 % of monthly sales
Rent expense $5,390 per month
Depreciation $910 per month
Utilities $710 per month
Insurance $560 per month

5. Interest expense is $2,000 per month. Income taxes are estimated to be 30% of income before income taxes.

[Partially correct answer.] Your answer is partially correct. Try again.

Prepare the merchandise purchases budget for each month in columnar form. (Round answers to 0 decimal places, e.g. 5,275.)

SUPPAR COMPANY
San Miguel Store
Merchandise Purchases Budget
[Entry field with correct answer]

For the Quarter Ended June, 2017
May and June, 2017
For the Months of May and June, 2017
May
June
[Entry field with correct answer]

Total
Direct Materials per Unit
Beginning Direct Materials
Total Materials Required
Units to be Produced
Budgeted Cost of Goods Sold
Beginning Merchandise Inventory
Desired Ending Direct Materials
Desired Ending Merchandise Inventory
Direct Materials Purchases
Required Merchandise Purchases
$
[Entry field with incorrect answer]
$
[Entry field with incorrect answer]
[Entry field with correct answer]

Add
Less
:
[Entry field with correct answer]

Direct Materials per Unit
Desired Ending Direct Materials
Required Merchandise Purchases
Direct Materials Purchases
Total
Desired Ending Merchandise Inventory
Total Materials Required
Units to be Produced
Beginning Direct Materials
Beginning Merchandise Inventory
Budgeted Cost of Goods Sold
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]

Direct Materials Purchases
Desired Ending Direct Materials
Direct Materials per Unit
Required Merchandise Purchases
Budgeted Cost of Goods Sold
Beginning Merchandise Inventory
Beginning Direct Materials
Total
Total Materials Required
Desired Ending Merchandise Inventory
Units to be Produced
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]

Add
Less
:
[Entry field with correct answer]

Total Materials Required
Total
Budgeted Cost of Goods Sold
Direct Materials per Unit
Desired Ending Direct Materials
Units to be Produced
Direct Materials Purchases
Beginning Direct Materials
Required Merchandise Purchases
Beginning Merchandise Inventory
Desired Ending Merchandise Inventory
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]

Direct Materials Purchases
Required Merchandise Purchases
Total
Total Materials Required
Units to be Produced
Beginning Direct Materials
Beginning Merchandise Inventory
Direct Materials per Unit
Budgeted Cost of Goods Sold
Desired Ending Direct Materials
Desired Ending Merchandise Inventory
$
[Entry field with incorrect answer]
$
[Entry field with incorrect answer]

LINK TO TEXT

[Partially correct answer.] Your answer is partially correct. Try again.

Prepare budgeted multiple-step income statements for each month in columnar form. Show in the statements the details of cost of goods sold. (Round answers to 0 decimal places, e.g. 5,275.)

SUPPAR COMPANY
San Miguel Store
Budgeted Income Statement
[Entry field with correct answer]

For the Months of May and June, 2017
May and June, 2017
For the Quarter Ended June, 2017
May
June
[Entry field with correct answer]

Advertising
Gross Profit
Depreciation
Income Before Income Taxes
Beginning Inventory
Cost of Goods Available for Sale
Purchases
Income from Operations
Interest Expense
Rent
Sales Commissions
Sales
Sales Salaries
Income Tax Expense
Total Operating Expenses
Utilities
Cost of Goods Sold
Ending Inventory
Delivery
Insurance
Net Income / (Loss)
Operating Expenses
$
[Entry field with incorrect answer]
$
[Entry field with incorrect answer]
[Entry field with correct answer]

Income from Operations
Ending Inventory
Sales Commissions
Total Operating Expenses
Beginning Inventory
Income Tax Expense
Delivery
Cost of Goods Available for Sale
Cost of Goods Sold
Advertising
Insurance
Net Income / (Loss)
Rent
Operating Expenses
Purchases
Utilities
Gross Profit
Sales Salaries
Depreciation
Sales
Income Before Income Taxes
Interest Expense
[Entry field with correct answer]
    
Income Tax Expense    
Beginning Inventory    
Cost of Goods Sold    
Operating Expenses    
Delivery    
Depreciation    
Rent    
Utilities    
Sales Salaries    
Purchases    
Ending Inventory    
Income Before Income Taxes    
Gross Profit    
Insurance    
Interest Expense    
Advertising    
Cost of Goods Available for Sale    
Income from Operations    
Net Income / (Loss)    
Sales    
Sales Commissions    
Total Operating Expenses    
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]
    
Delivery    
Income from Operations    
Utilities    
Cost of Goods Available for Sale    
Sales Salaries    
Income Before Income Taxes    
Income Tax Expense    
Operating Expenses    
Depreciation    
Gross Profit    
Advertising    
Ending Inventory    
Interest Expense    
Beginning Inventory    
Insurance    
Purchases    
Cost of Goods Sold    
Net Income / (Loss)    
Rent    
Sales    
Sales Commissions    
Total Operating Expenses    
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]
    
Depreciation    
Delivery    
Cost of Goods Available for Sale    
Interest Expense    
Income from Operations    
Sales Commissions    
Total Operating Expenses    
Net Income / (Loss)    
Operating Expenses    
Beginning Inventory    
Income Before Income Taxes    
Ending Inventory    
Income Tax Expense    
Advertising    
Cost of Goods Sold    
Insurance    
Sales Salaries    
Rent    
Gross Profit    
Purchases    
Sales    
Utilities    
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]
    
Purchases    
Beginning Inventory    
Depreciation    
Gross Profit    
Total Operating Expenses    
Income from Operations    
Insurance    
Ending Inventory    
Income Tax Expense    
Net Income / (Loss)    
Operating Expenses    
Cost of Goods Available for Sale    
Rent    
Sales    
Sales Commissions    
Cost of Goods Sold    
Sales Salaries    
Delivery    
Utilities    
Income Before Income Taxes    
Interest Expense    
Advertising    
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]
    
Insurance    
Income Tax Expense    
Total Operating Expenses    
Net Income / (Loss)    
Utilities    
Operating Expenses    
Income from Operations    
Gross Profit    
Ending Inventory    
Purchases    
Income Before Income Taxes    
Depreciation    
Sales    
Delivery    
Rent    
Sales Commissions    
Sales Salaries    
Interest Expense    
Advertising    
Beginning Inventory    
Cost of Goods Available for Sale    
Cost of Goods Sold    
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]

Gross Profit
Beginning Inventory
Utilities
Income Before Income Taxes
Rent
Cost of Goods Available for Sale
Advertising
Ending Inventory
Depreciation
Interest Expense
Cost of Goods Sold
Income from Operations
Purchases
Operating Expenses
Delivery
Net Income / (Loss)
Income Tax Expense
Sales
Insurance
Sales Commissions
Sales Salaries
Total Operating Expenses
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]

Income Tax Expense
Net Income / (Loss)
Beginning Inventory
Total Operating Expenses
Ending Inventory
Sales Salaries
Cost of Goods Sold
Insurance
Operating Expenses
Interest Expense
Depreciation
Gross Profit
Sales
Sales Commissions
Rent
Income from Operations
Advertising
Utilities
Delivery
Cost of Goods Available for Sale
Purchases
Income Before Income Taxes
[Entry field with correct answer]
    
Total Operating Expenses    
Utilities    
Ending Inventory    
Income Before Income Taxes    
Purchases    
Income Tax Expense    
Sales Commissions    
Rent    
Beginning Inventory    
Gross Profit    
Interest Expense    
Delivery    
Sales Salaries    
Income from Operations    
Advertising    
Cost of Goods Available for Sale    
Depreciation    
Cost of Goods Sold    
Insurance    
Sales    
Net Income / (Loss)    
Operating Expenses    
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]
    
Purchases    
Interest Expense    
Income from Operations    
Cost of Goods Available for Sale    
Advertising    
Total Operating Expenses    
Beginning Inventory    
Income Tax Expense    
Operating Expenses    
Delivery    
Cost of Goods Sold    
Depreciation    
Utilities    
Rent    
Ending Inventory    
Net Income / (Loss)    
Sales Commissions    
Gross Profit    
Sales    
Insurance    
Sales Salaries    
Income Before Income Taxes    
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]
    
Sales Commissions    
Total Operating Expenses    
Purchases    
Rent    
Delivery    
Interest Expense    
Utilities    
Cost of Goods Sold    
Depreciation    
Income from Operations    
Sales    
Income Tax Expense    
Income Before Income Taxes    
Advertising    
Sales Salaries    
Insurance    
Gross Profit    
Beginning Inventory    
Cost of Goods Available for Sale    
Ending Inventory    
Net Income / (Loss)    
Operating Expenses    
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]
    
Cost of Goods Available for Sale    
Cost of Goods Sold    
Sales Salaries    
Delivery    
Total Operating Expenses    
Depreciation    
Beginning Inventory    
Interest Expense    
Ending Inventory    
Income Tax Expense    
Advertising    
Utilities    
Gross Profit    
Income from Operations    
Operating Expenses    
Purchases    
Net Income / (Loss)    
Insurance    
Rent    
Sales    
Income Before Income Taxes    
Sales Commissions    
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]
    
Advertising    
Total Operating Expenses    
Rent    
Cost of Goods Sold    
Sales Salaries    
Sales    
Depreciation    
Delivery    
Gross Profit    
Income from Operations    
Purchases    
Income Tax Expense    
Net Income / (Loss)    
Operating Expenses    
Cost of Goods Available for Sale    
Utilities    
Sales Commissions    
Insurance    
Interest Expense    
Beginning Inventory    
Income Before Income Taxes    
Ending Inventory    
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]
    
Sales    
Operating Expenses    
Depreciation    
Total Operating Expenses    
Net Income / (Loss)    
Insurance    
Sales Commissions    
Advertising    
Ending Inventory    
Purchases    
Delivery    
Sales Salaries    
Utilities    
Gross Profit    
Income Before Income Taxes    
Beginning Inventory    
Rent    
Interest Expense    
Cost of Goods Available for Sale    
Income from Operations    
Cost of Goods Sold    
Income Tax Expense    
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]
    
Ending Inventory    
Gross Profit    
Sales Commissions    
Net Income / (Loss)    
Rent    
Sales    
Sales Salaries    
Total Operating Expenses    
Cost of Goods Available for Sale    
Operating Expenses    
Insurance    
Income Tax Expense    
Utilities    
Interest Expense    
Advertising    
Income Before Income Taxes    
Cost of Goods Sold    
Beginning Inventory    
Delivery    
Depreciation    
Income from Operations    
Purchases    
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]
    
Advertising    
Net Income / (Loss)    
Beginning Inventory    
Cost of Goods Available for Sale    
Cost of Goods Sold    
Sales Commissions    
Sales Salaries    
Utilities    
Ending Inventory    
Income from Operations    
Total Operating Expenses    
Sales    
Income Before Income Taxes    
Gross Profit    
Delivery    
Income Tax Expense    
Depreciation    
Insurance    
Interest Expense    
Operating Expenses    
Purchases    
Rent    
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]
    
Delivery    
Depreciation    
Insurance    
Advertising    
Net Income / (Loss)    
Ending Inventory    
Operating Expenses    
Purchases    
Gross Profit    
Beginning Inventory    
Utilities    
Income from Operations    
Rent    
Income Tax Expense    
Sales Salaries    
Sales    
Sales Commissions    
Cost of Goods Available for Sale    
Total Operating Expenses    
Interest Expense    
Income Before Income Taxes    
Cost of Goods Sold    
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]

Cost of Goods Available for Sale
Net Income / (Loss)
Income from Operations
Utilities
Operating Expenses
Delivery
Income Before Income Taxes
Purchases
Depreciation
Interest Expense
Total Operating Expenses
Income Tax Expense
Rent
Advertising
Beginning Inventory
Insurance
Cost of Goods Sold
Ending Inventory
Gross Profit
Sales
Sales Commissions
Sales Salaries
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]

Income Before Income Taxes
Rent
Cost of Goods Sold
Sales Commissions
Net Income / (Loss)
Advertising
Delivery
Interest Expense
Sales Salaries
Sales
Beginning Inventory
Depreciation
Total Operating Expenses
Income Tax Expense
Income from Operations
Cost of Goods Available for Sale
Ending Inventory
Gross Profit
Utilities
Operating Expenses
Insurance
Purchases
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]

Net Income / (Loss)
Rent
Operating Expenses
Purchases
Depreciation
Sales
Utilities
Beginning Inventory
Income Before Income Taxes
Insurance
Sales Commissions
Sales Salaries
Ending Inventory
Total Operating Expenses
Interest Expense
Cost of Goods Available for Sale
Cost of Goods Sold
Delivery
Gross Profit
Advertising
Income from Operations
Income Tax Expense
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]

Advertising
Gross Profit
Beginning Inventory
Net Income / (Loss)
Ending Inventory
Operating Expenses
Delivery
Depreciation
Income from Operations
Sales Commissions
Cost of Goods Available for Sale
Insurance
Purchases
Rent
Cost of Goods Sold
Income Tax Expense
Sales
Sales Salaries
Total Operating Expenses
Utilities
Income Before Income Taxes
Interest Expense
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]

Utilities
Beginning Inventory
Gross Profit
Interest Expense
Total Operating Expenses
Income from Operations
Cost of Goods Available for Sale
Income Before Income Taxes
Net Income / (Loss)
Advertising
Sales Commissions
Sales Salaries
Sales
Cost of Goods Sold
Delivery
Income Tax Expense
Depreciation
Ending Inventory
Insurance
Operating Expenses
Purchases
Rent
$
[Entry field with incorrect answer]
$
[Entry field with incorrect answer]

Consider the hand bag market.

Assume this market is monopolistic competition.

1. Select a company and its handbags and explain how their handbags are distinguished in the market. (For example, Bottega Veneta uses a cross woven leather that makes its hand bags, supple, durable and attractive).

Because of that distinguishing characteristic, assume your company is earning a profit.

2. Please draw a monopolistic competition diagram showing that your company is earning a profit (note: careful with the demand line - it should be distinguished from a monopoly diagram - see section 10.1 in your text and the diagrams in "perceived demand …)

3. Assume now that competition has heated up and a competitor has a handbag out that is similar to your own (For example Michael Kors might come out with a cross hatched leather hand bag). Please explain this competition and show how it effects the demand of your handbag as well as your profits on the diagram.

4. Given this event, assume that your company would like to maintain its profits. Explain what it might do, and explain how it would effect your diagram.

5. Please explain some of the efficiency issues with monopolistic competition as they relate to your example..

6. Please explain some of the advantages of monopolistic competition as they relate to your example.