On January 1, 2017, AJ Corporation purchased bonds with a face value of $300,000 for $308,373.53. The bonds are due June 30, 2020, carry a 13% stated interest rate, and were purchased to yield 12%. Interest is payable semiannually on June 30 and December 31. On March 31, 2018, in contemplation of a major acquisition, the company sold one-half the bonds for $159,500 including accrued interest; the remainder were held until maturity.

Prepare an investment interest income and bond premium amortization schedule using the effective interest method.

Prepare the journal entries to record the purchase of the bonds.

Prepare the journal entries to record each interest payment.

Prepare the journal entries to record the partial sale of the investment on March 31, 2018, and the retirement of the bond issue on June 30, 2020.

Required information

[The following information applies to the questions displayed below.]
  
In 2018, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2020. Information related to the contract is as follows:

Westgate recognizes revenue over time according to percentage of completion.

Required:

1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. (Do not round intermediate calculations. Loss amounts should be indicated with a minus sign.)

Germany has given Zambia a K370 million rapid response package to mitigate the effects of COVID – 19 (Coronavirus), especially on the vulnerable. The support is focusing on expanding social protection measures through social cash transfers and supporting health systems in combating the pandemic by procuring medical supplies like protective equipment, essential medicines, and enhancing testing and laboratory capacity (Tuesday, May 12, 2020: Zambia Daily Mail.)
In April, 2020, Trade Kings made a contribution of K155, 000.00 to the fight against the spread of COVID – 19 (Coronavirus) in Zambia. What justification do you think the company management should give or will give to the owners of the business for taking such a commendable action? Is there any Economic benefit in taking such an action? .
(Be constructive and Analytical in your justification)

Problem 6-1A Perpetual: Alternative cost flows LO P1

[The following information applies to the questions displayed below.]

Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.

Required:
1. Compute cost of goods available for sale and the number of units available for sale.
2. Compute the number of units in ending inventory.
3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the March 9 sale consisted of 70 units from beginning inventory and 200 units from the March 5 purchase; the March 29 sale consisted of 50 units from the March 18 purchase and 90 units from the March 25 purchase.

4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 70 units from beginning inventory and 200 units from the March 5 purchase; the March 29 sale consisted of 50 units from the March 18 purchase and 90 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.)

SQL

A manufacturing company’s data warehouse contains the following tables.

Region

Note: (p) = "primary key" and (f) = "foreign key". They are not part of the column names.

Product

Sales_Totals

Answer the following questions using the above tables/data:

6. Write a set of SQL statements which will add a row to the Region table for Europe, and then add a row to the Sales_Total table for the Europe region and the Sprocket product (product_id = 7684) for October 2020, with a sales total of $1,500. You can assign any value to the region_id column, as long as it is unique to the Region table. The statements should be executed as a single unit of work. Please note that since the statements are executed as a single unit of work, additional code is needed.

Required:

1. Calculate return on investment, based on net income and average total assets, for 2020 and 2019.
2. Calculate return on equity for 2020 and 2019.
3. Calculate working capital and the current ratio for each of the past three years.
4. Calculate earnings per share for 2020 and 2019.
5. If Wiper's stock had a price/earnings ratio of 12 at the end of 2020, what was the market price of the stock?
6. Calculate the cash dividend per share for 2020 and the dividend yield based on the market price calculated in part e.
7. Calculate the dividend payout ratio for 2020.
8. Assume that accounts receivable at December 31, 2020, totaled $311 million. Calculate the number of days' sales in receivables at that date.
9. Calculate Wiper's debt ratio and debt/equity ratio at December 31, 2020 and 2019.
10. Calculate the times interest earned ratio for 2020 and 2019.

4. Capstone, Inc. (Chapter 9)

Capstone, Inc. is preparing its budget for the coming year, 2020. The first step is to plan for the first quarter of that coming year. Capstone, Inc. gathered the following information from the managers.

Sales

Unit sales for November 2019                       113,000

Unit sales for December 2019                        103,000

Expected unit sales for January 2020                        115,000

Expected unit sales for February 2020           114,500

Expected unit sales for March 2020               118,000

Expected unit sales for April 2020                 130,000

Expected unit sales for May 2020                  140,000

Unit selling price                                              $12.50

Capstone, Inc. likes to keep 10% of the next month’s unit sales in ending inventory. All sales are on account. 85% of the Accounts Receivable are collected in the month of sale, and 15% of the Accounts Receivable are collected in the month after sale. Accounts receivable on December 31, 2019, totaled $175,000.

Direct Materials

Item                 Amount Used per Unit           Inventory, Dec. 31

Metal                  1 lb @ 58¢ per lb.                                5,177.5 lbs

Plastic             12 oz @ 6¢ per oz                              3,883.125 lbs

Rubber              12 oz @ 5¢ per oz                             1,294.375 lbs

2.5 lbs per unit total                10,355.0   lbs

Metal, plastic, and rubber together are 75¢ per pound per unit. (Hint: Do not prepare a separate materials purchases budget for each item of direct materials. Prepare a combined budget using the lbs per unit total applied to the budgeted production).

Capstone, Inc. likes to keep 5% of the materials needed for the next month in its ending inventory. Payment for materials is made within 15 days. 50% is paid in the month of purchase, and 50% is paid in the month after purchase. Accounts Payable on December 31, 2019, totaled $135,000. Raw Materials on December 31, 2019, totaled 10,355 pounds.

Direct Labor

Labor requires 15 minutes per unit for completion and is paid at a rate of $8 per hour.

Manufacturing Overhead

Indirect materials                   35¢ per labor hour

Indirect labor                          55¢ per labor hour

Utilities                                   40¢ per labor hour

Maintenance                           20¢ per labor hour

Salaries                                   $42,000 per month

Depreciation                           $16,800 per month

Property taxes                                     $ 2,675 per month

Insurance                                $ 1,200 per month

Janitorial                                 $ 1,300 per month

Selling and Administrative

Variable selling and administrative cost per unit is $1.60.

Advertising                             $15,500 a month

Insurance                                $ 1,250 a month

Salaries                                   $75,000 a month

            Depreciation                           $ 3,000 a month

Other fixed costs                     $ 3,500 a month

Other Information

The Cash balance on December 31, 2019, totaled $115,000, but management has decided it would like to maintain a cash balance of at least $800,000 beginning on January 31, 2020. Dividends are paid each month at the rate of $1.75 per share for 6,000 shares outstanding. The company has an open line of credit with Romney’s Bank. The terms of the agreement requires the borrowing to be in $1,000 increments at 8% interest. Capstone, Inc. borrows on the first day of the month and repays on the last day of the month. A $525,000 equipment purchase is planned for February.

Instructions

For the first quarter of 2020, do the following.

1. Prepare a sales budget.
2. Prepare a production budget.
3. Prepare a direct materials budget. (Round to nearest dollar)
4. Prepare a direct labor budget. (For calculations, round to the nearest hour.)
5. Prepare a manufacturing overhead budget. (Round amounts to the nearest dollar.)
6. Prepare a selling and administrative budget.
7. Prepare a schedule for expected cash collections from customers.
8. Prepare a schedule for expected payments for materials purchases. (Round totals to nearest dollar)
9. Prepare a cash budget.

4. Capstone, Inc. (Chapter 9)

Capstone, Inc. is preparing its budget for the coming year, 2020. The first step is to plan for the first quarter of that coming year. Capstone, Inc. gathered the following information from the managers.

Sales

Unit sales for November 2019                       113,000

Unit sales for December 2019                        103,000

Expected unit sales for January 2020                        115,000

Expected unit sales for February 2020           114,500

Expected unit sales for March 2020               118,000

Expected unit sales for April 2020                 130,000

Expected unit sales for May 2020                  140,000

Unit selling price                                              $12.50

Capstone, Inc. likes to keep 10% of the next month’s unit sales in ending inventory. All sales are on account. 85% of the Accounts Receivable are collected in the month of sale, and 15% of the Accounts Receivable are collected in the month after sale. Accounts receivable on December 31, 2019, totaled $175,000.

Direct Materials

Item                 Amount Used per Unit           Inventory, Dec. 31

Metal                  1 lb @ 58¢ per lb.                                5,177.5 lbs

Plastic             12 oz @ 6¢ per oz                              3,883.125 lbs

Rubber              12 oz @ 5¢ per oz                             1,294.375 lbs

2.5 lbs per unit total                10,355.0   lbs

Metal, plastic, and rubber together are 75¢ per pound per unit. (Hint: Do not prepare a separate materials purchases budget for each item of direct materials. Prepare a combined budget using the lbs per unit total applied to the budgeted production).

Capstone, Inc. likes to keep 5% of the materials needed for the next month in its ending inventory. Payment for materials is made within 15 days. 50% is paid in the month of purchase, and 50% is paid in the month after purchase. Accounts Payable on December 31, 2019, totaled $135,000. Raw Materials on December 31, 2019, totaled 10,355 pounds.

Direct Labor

Labor requires 15 minutes per unit for completion and is paid at a rate of $8 per hour.

Manufacturing Overhead

Indirect materials                   35¢ per labor hour

Indirect labor                          55¢ per labor hour

Utilities                                   40¢ per labor hour

Maintenance                           20¢ per labor hour

Salaries                                   $42,000 per month

Depreciation                           $16,800 per month

Property taxes                                     $ 2,675 per month

Insurance                                $ 1,200 per month

Janitorial                                 $ 1,300 per month

Selling and Administrative

Variable selling and administrative cost per unit is $1.60.

Advertising                             $15,500 a month

Insurance                                $ 1,250 a month

Salaries                                   $75,000 a month

            Depreciation                           $ 3,000 a month

Other fixed costs                     $ 3,500 a month

Other Information

The Cash balance on December 31, 2019, totaled $115,000, but management has decided it would like to maintain a cash balance of at least $800,000 beginning on January 31, 2020. Dividends are paid each month at the rate of $1.75 per share for 6,000 shares outstanding. The company has an open line of credit with Romney’s Bank. The terms of the agreement requires the borrowing to be in $1,000 increments at 8% interest. Capstone, Inc. borrows on the first day of the month and repays on the last day of the month. A $525,000 equipment purchase is planned for February.

Instructions

For the first quarter of 2020, do the following.

1. Prepare a sales budget.
2. Prepare a production budget.
3. Prepare a direct materials budget. (Round to nearest dollar)
4. Prepare a direct labor budget. (For calculations, round to the nearest hour.)
5. Prepare a manufacturing overhead budget. (Round amounts to the nearest dollar.)
6. Prepare a selling and administrative budget.
7. Prepare a schedule for expected cash collections from customers.
8. Prepare a schedule for expected payments for materials purchases. (Round totals to nearest dollar)
9. Prepare a cash budget.

An insurance company agrees to pay the promoter of a drag race $15000 if the race has to be canceled because of rain. If the company's actuary feels that a fair net premium for this risk is $2400, what does this tell us about his assessment of the probability that the race will have to be canceled because of rain? （Please indicate the formula and Explain each step in detail. Thank you.）