Statistic

Q2

A restaurant chain owner would like to know the sales of a certain signature dish in his restaurants. A random sample of 120 restaurants is selected and the sales of the dish in 2018 are summarized as follows.

Q2(a) Calculate the mean, median and standard deviation of the sales.

Q2(b) Calculate the coefficient of skewness using results in (a) and interpret your result briefly.

Q2(c) Estimate, from the frequency distribution table, the number of restaurants who sales were between $38,500 and $54,500 in 2018.

Q2(d) Estimate, from the frequency distribution table, the sales amount that exceeded by 30% of the restaurants in 2018.

On January 1, 2018, Byner Company purchased a used tractor. Byner paid $3,000 down and signed a noninterest-bearing note requiring $44,000 to be paid on December 31, 2020. The fair value of the tractor is not determinable. An interest rate of 11% properly reflects the time value of money for this type of loan agreement. The company’s fiscal year-end is December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

Required:
1. Prepare the journal entry to record the acquisition of the tractor.
2. How much interest expense will the company include in its 2018 and 2019 income statements for this note?
3. What is the amount of the liability the company will report in its 2018 and 2019 balance sheets for this note?
  

Dosmann, Inc., bought all outstanding shares of Lizzi Corporation on January 1, 2016, for $830,000 in cash. This portion of the consideration transferred results in a fair-value allocation of $63,000 to equipment and goodwill of $109,200. At the acquisition date, Dosmann also agrees to pay Lizzi’s previous owners an additional $198,000 on January 1, 2018, if Lizzi earns a 10 percent return on the fair value of its assets in 2016 and 2017. Lizzi’s profits exceed this threshold in both years. Which of the following is true?

a. The fair value of the expected contingent payment increases goodwill at the acquisition date.

b. Consolidated goodwill as of January 1, 2018, increases by $198,000.

c. The $198,000 is recorded as an expense in 2018.

d. The additional $198,000 payment is a reduction in consolidated retained earnings.

Midias Mechanical Company reconditions motors for Drift Racing cars. They bought a shipping container of 500 motors from Japan (model number ZF290) for $1,000,000. The reconditioning cost of each motor is $900 and the recomputing cost of each motor is $700. Commission on sales was paid to the head mechanic of Race Teams, at $80 per motor.

The average sale price of a ZF290 motor is $11,000. Administrative costs was $88,500 each year. In 2017, Midias Mechanical Company sold 100 motors and in 2018 sold 250 motors.

Requirement:

Prepare Absorption Income Statement for 2017

Prepare Absorption Income Statement for 2018

Prepare Variable Income Statement for 2017

Prepare Variable Income Statement for 2018

Note: you are required to show your workings

Due to a cash shortage, Purkerson invests an additional $6,000 in the business on April 1, 2018.

Each partner is allowed to withdraw $700 cash each month.

The partners have used the same method of allocating profits and losses since the business's inception:

• Each partner is given the following compensation allowance for work done in the business: Purkerson, $14,000; Smith, $24,000; and Traynor, $4,000.
• Each partner is credited with interest equal to 20 percent of the average monthly capital balance for the year without regard for normal drawings.
• Any remaining profit or loss is allocated 3:2:5 to Purkerson, Smith, and Traynor, respectively. The net income for 2018 is $24,000. Each partner withdraws the allotted amount each month.

What are the ending capital balances for 2018?

Consider the current and pro forma financial statements that follow.

2018 2019

Sales 200 220

Variable Costs   100 110

Fixed Costs 80 80

Net Income 20 30

Dividends 10 22

Current Assets 120 132

Fixed Assets 200 200

Total Assets 320 332

Current Liabilities 40 44

Long-Term Debt 40 40

Common Stock 40 40

Retained Earnings 200 208

Total Liabilities and Equity 320 332

AFN = 0

Compute the following ratios for 2018 and 2019:

2018 2019

Current Ratio ________ ________

Debt to Assets Ratio ________ ________

Sales to Assets Ratio _______ ________

Net Profit Margin ________ ________

Return on Assets ________ ________

Return on Equity ________ ________

Comment on any trends revealed by your ratio analysis.

On January 1, 2017, Alison, Inc., paid $60,000 for a 40 percent interest in Holister Corporation’s common stock. This investee had assets with a book value of $200,000 and liabilities of $75,000. A patent held by Holister having a $5,000 book value was actually worth $20,000. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed to goodwill. During 2017, Holister earned income of $30,000 and declared and paid dividends of $10,000. In 2018, it had income of $50,000 and dividends of $15,000. During 2018, the fair value of Allison’s investment in Holister had risen from $68,000 to $75,000.

Assuming Alison uses the equity method, what balance should appear in the Investment in Holister account as of December 31, 2018?

Required information

Altira Corporation uses a perpetual inventory system. The following transactions affected its merchandise inventory during the month of August 2018:

3. Determine the inventory balance Altira would report in its August 31, 2018, balance sheet and the cost of goods sold it would report in its August 2018 income statement using the Average cost method. (Round "Average Cost per Unit" to 2 decimal places.)

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:
5. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information.