20.An examination of the capital cost allowance schedule for 2020 provided the following opening balances for the undepreciated capital cost for each class of EASI's assets:

The following additional information was found in the 2020 fixed asset schedules working paper files.

A. The building which cost $997,426 in 1992 was sold for $150,000. It was the only building in Class 1 at the time of its sale. A new building was purchased (non used) in April 2020 for $750,000. Also, in February 2020 a lot adjacent to the new building, was purchased for $100,000 for use as a parking lot by employees and visitors. This lot was paved at a cost of $25,000. A fence was erected around an outside storage area near the new building at a cost of $40,000.

B New office furniture was purchased for $20,000. This purchase replaced old assets which were sold for $5,000. None of the old assets was sold for more than capital cost.

C Three small trucks purchased in 2015 for $12,000 each were traded in for three new trucks. Each new truck was priced at $15,000, but this was reduced by a trade-in credit of $2,500 for each old truck.

D. Some small tools were sold for a total of $7,000. All of these tools were sold at a price less than their capital cost.

E. Leasehold improvements had been made to a leased warehouse at a cost of $225,000 in October 2018. The remaining length of the lease in that year was six years with two successive renewal options of three years each. Further leasehold improvements were made to this warehouse in 2020 at a cost of $21,000.

F.During 2020, an unlimited life franchise was purchased for $48,000.

G.Accounting gains and losses on the above asset sales netted to nil.

Required:

Based on the foregoing information, Compute the income from business for tax purposes for Eldridge Asset Sales Inc. for its 2020 fiscal year.

1. Your answer should incude the following six column

2. Follow the sequence of information given above 1 to 20.
3. Show all calculations whether or not they seem relevant to the final answer.
4. Provde CCA calculation

State your assumptions if any information is not adequate for your calculation

Presidio, Inc., produces one model of mountain bike. Partial information for the company follows:

Required:
1. Complete Presidio’s cost data table.
2. Calculate Presidio’s contribution margin ratio and its total contribution margin at each sales level indicated in the cost data table assuming the company sells each bike for $620.
3. Calculate net operating income (loss) at each of the sales levels assuming a sales price of $620.

Complete Presidio’s cost data table. (Round your Cost per Unit answers to 2 decimal places.)

Calculate Presidio’s contribution margin ratio and its total contribution margin at each sales level indicated in the cost data table assuming the company sells each bike for $620. (Round your Contribution Margin Ratio percentage answers to 2 decimal places (i.e. .1234 should be entered as 12.34%.))

Calculate net operating income (loss) at each of the sales levels assuming a sales price of $620. (Round your answers to the nearest whole dollar amount.)

1. An important application of regression analysis in accounting is in the estimation of cost. By collecting data on volume and cost and using the least squares method to develop an estimated regression equation relating volume and cost, an accountant can estimate the cost associated with a particular manufacturing volume. Consider the following sample of production volumes and total cost data for a manufacturing operation.

1. Compute b₁ and b₀ (to 1 decimal).
   b₁
   b₀
   
   Complete the estimated regression equation (to 1 decimal).
   =  +  x
   
2. What is the variable cost per unit produced (to 1 decimal)?
   $
   
3. Compute the coefficient of determination (to 3 decimals). Note: report r² between 0 and 1.
   r² =
   
   What percentage of the variation in total cost can be explained by the production volume (to 1 decimal)?
   %
   
4. The company's production schedule shows 500 units must be produced next month. What is the estimated total cost for this operation (to the nearest whole number)?
   $

2.

Consider the following data for a dependent variable y and two independent variables, x₁and x₂; for these data SST = 15,029.6, and SSR = 13,917.

Round your answers to three decimal places.

a. Compute R².

b. Compute R_a².

PA6-1 Calculating Contribution Margin, Contribution Margin Ratio, Break-Even Point [LO 6-1, 6-2]

Hermosa, Inc., produces one model of mountain bike. Partial information for the company follows:

Required:
1. Complete the table. (Round your "Cost per Unit" answers to 2 decimal places.)

  
2. Calculate Hermosa’s contribution margin ratio and its total contribution margin at each sales level indicated in the table assuming the company sells each bike for $800. (Round your percentage answers to 2 decimal places. (i.e. .1234 should be entered as 12.34%.))

4. Calculate Hermosa’s break-even point in units and sales revenue. (Round your answers to the nearest whole number.)

The Economic Order Quantity (EOQ) model is a classical model used for controlling inventory and satisfying demand. Costs included in the model are holding cost per unit, ordering cost and the cost of goods ordered. The assumptions for that model are that only a single item is considered, that the entire quantity ordered arrives at one time, that the demand for the item is constant over time, and that no shortages are allowed.

Suppose we relax the first assumption and allow for multiple items that are independent except for a restriction on the amount of space available to store the products. The following model describes this situation:

The decision variables are Q_j, the amount of item j to order. The model is:

In the objective function, the first term is the annual cost of goods, the second is the annual ordering cost (D_j/Q_j is the number of orders), and the last term is the annual inventory holding cost (Q_j/2 is the average amount of inventory).

Set up a spreadsheet model for the following data:

W = 5,000

i = 0.2

Solve the problem using Excel Solver. Hint: You will need to start with decision variable values that are greater than 0 for Solver to find a solution.

If required, round your answers to two decimal places.

Optimal Solution:

Q₁ = _______

Q₂ = _______

Q₃ = _______

If required, round your answer to the nearest dollar. Do not round intermediate calculations.

Total cost = $________

The Economic Order Quantity (EOQ) model is a classical model used for controlling inventory and satisfying demand. Costs included in the model are holding cost per unit, ordering cost and the cost of goods ordered. The assumptions for that model are that only a single item is considered, that the entire quantity ordered arrives at one time, that the demand for the item is constant over time, and that no shortages are allowed.

Suppose we relax the first assumption and allow for multiple items that are independent except for a restriction on the amount of space available to store the products. The following model describes this situation:

The decision variables are Q_j, the amount of item j to order. The model is:

In the objective function, the first term is the annual cost of goods, the second is the annual ordering cost (D_j/Q_j is the number of orders), and the last term is the annual inventory holding cost (Q_j/2 is the average amount of inventory).

Set up a spreadsheet model for the following data:

W = $21,000

i = 0.3

Solve the problem using Excel Solver. Hint: You will need to start with decision variable values that are greater than 0 for Solver to find a solution.

If required, round your answers to two decimal places.

Optimal Solution:

Q₁ =  

Q₂ =  

Q₃ =  

If required, round your answer to the nearest dollar. Do not round intermediate calculations.

Total cost = $

The Economic Order Quantity (EOQ) model is a classical model used for controlling inventory and satisfying demand. Costs included in the model are holding cost per unit, ordering cost and the cost of goods ordered. The assumptions for that model are that only a single item is considered, that the entire quantity ordered arrives at one time, that the demand for the item is constant over time, and that no shortages are allowed.

Suppose we relax the first assumption and allow for multiple items that are independent except for a restriction on the amount of space available to store the products. The following model describes this situation:

The decision variables are Q_j, the amount of item j to order. The model is:

In the objective function, the first term is the annual cost of goods, the second is the annual ordering cost (D_j/Q_j is the number of orders), and the last term is the annual inventory holding cost (Q_j/2 is the average amount of inventory).

Set up a spreadsheet model for the following data:

W = $21,000

i = 0.3

Solve the problem using Excel Solver. Hint: You will need to start with decision variable values that are greater than 0 for Solver to find a solution.

If required, round your answers to two decimal places.

Optimal Solution:

Q₁ =  

Q₂ =  

Q₃ =  

If required, round your answer to the nearest dollar. Do not round intermediate calculations.

Total cost = $

#1-Physical Units Method

Alomar Company manufactures four products from a joint production process: barlon, selene, plicene, and corsol. The joint costs for one batch are as follows:

At the split-off point, a batch yields 1,135 barlon, 2,993 selene, 2,580 plicene, and 3,612 corsol. All products are sold at the split-off point: barlon sells for $12 per unit, selene sells for $19 per unit, plicene sells for $27 per unit, and corsol sells for $37 per unit.

Required:

1. Allocate the joint costs using the physical units method. If required, round your percentage allocation to four decimal places and round allocated costs to the nearest dollar. Note: The total of the allocated cost does not equal to the one provided in the question data due to rounding error.

2. Suppose that the products are weighted as shown below:

Allocate the joint costs using the weighted average method. If required, round your percentage allocation to four decimal places and round allocated costs to the nearest dollar.

__________________________________________________________________________________________________________________________

#2-Sales-Value-at-Split-off Method

Alomar Company manufactures four products from a joint production process: barlon, selene, plicene, and corsol. The joint costs for one batch are as follows:

At the split-off point, a batch yields 1,700 barlon, 2,300 selene, 2,200 plicene, and 3,300 corsol. All products are sold at the split-off point: barlon sells for $18 per unit, selene sells for $22 per unit, plicene sells for $29 per unit, and corsol sells for $36 per unit.

Required:

Allocate the joint costs using the sales-value-at-split-off method. If required, round allocation rates to four decimal places and round the final allocations to the nearest dollar.

(Note: The total of the allocated cost may not equal actual total costs to due to rounding.)

In the town of Hooterville, all the downtown stores are identical and all the people who shop downtown are identical. The town can earn revenue in three ways: • It can charge each store a montly license fee. • It can charge an excise tax on the store’s merchandise. • It can charge shoppers to park on the streets (the only way to get downtown is to drive, so every shopper pays the parking fee). The town’s goal is to maximize its total revenue from all three sources. a) How big should the excise tax be? b) Suppose a court ruling requires the town to provide free parking. Now how big should the excise tax be? If necessary, you can answer in terms of labeled portions of graphs. If you do this, please be sure to say why these portions of your graph are relevant to the problem.