Ratchet Company uses budgets in controlling costs. The August
2020 budget report for the company’s Assembling Department is as
follows.
|
RATCHET COMPANY |
||||
|
Difference |
||||
|
|
|
|
Favorable |
|
| Variable costs | ||||
| Direct materials |
$53,760 |
$52,760 |
$1,000 |
Favorable |
| Direct labor |
61,440 |
58,340 |
3,100 |
Favorable |
| Indirect materials |
25,600 |
25,700 |
100 |
Unfavorable |
| Indirect labor |
19,200 |
18,730 |
470 |
Favorable |
| Utilities |
22,400 |
22,240 |
160 |
Favorable |
| Maintenance |
7,680 |
7,940 |
260 |
Unfavorable |
| Total variable |
190,080 |
185,710 |
4,370 |
Favorable |
| Fixed costs | ||||
| Rent |
10,500 |
10,500 |
–0– |
Neither Favorable nor Unfavorable |
| Supervision |
16,100 |
16,100 |
–0– |
Neither Favorable nor Unfavorable |
| Depreciation |
5,400 |
5,400 |
–0– |
Neither Favorable nor Unfavorable |
| Total fixed |
32,000 |
32,000 |
–0– |
Neither Favorable nor Unfavorable |
| Total costs |
$222,080 |
$217,710 |
$4,370 |
Favorable |
The monthly budget amounts in the report were based on an expected
production of 64,000 units per month or 768,000 units per year. The
Assembling Department manager is pleased with the report and
expects a raise, or at least praise for a job well done. The
company president, however, is unhappy with the results for August
because only 62,000 units were produced.
State the total monthly budgeted cost formula. Prepare a budget report for August using flexible budget data. In September, 68,000 units were produced. Prepare the budget report using flexible budget data, assuming (1) each variable cost was 10% higher than its actual cost in August, and (2) fixed costs were the same in September as in August
In: Accounting
The stockholders’ equity accounts of Waterway Company have the
following balances on December 31, 2020.
| Common stock, $10 par, 281,000 shares issued and outstanding | $2,810,000 | |
| Paid-in capital in excess of par—common stock | 1,220,000 | |
| Retained earnings | 5,600,000 |
Shares of Waterway Company stock are currently selling on the
Midwest Stock Exchange at $34.
Prepare the appropriate journal entries for each of the following
cases. (Credit account titles are automatically
indented when amount is entered. Do not indent manually. If no
entry is required, select "No Entry" for the account titles and
enter 0 for the amounts.)
| (a) | A stock dividend of 6% is (1) declared and (2) issued. | |
|---|---|---|
| (b) | A stock dividend of 100% is (1) declared and (2) issued. | |
| (c) | A 2-for-1 stock split is (1) declared and (2) issued. |
In: Accounting
Flynn acquires 100 percent of the outstanding voting shares of Macek Company on January 1, 2020. To obtain these shares, Flynn pays $400 (in thousands) and issues 10,000 shares of $20 par value common stock on this date. Flynn's stock had a fair value of $36 per share on that date. Flynn also pays $15 (in thousands) to a local investment firm for arranging the transaction. An additional $10 (in thousands) was paid by Flynn in stock issuance costs.
The preacquisition book values for both Flynn and Macek as of January 1, 2020 follow. The fair value
of each of Flynn and Macek accounts is also included. In addition, Macek holds a fully amortized
trademark that still retains a $40 (in thousands) value. The figures below are in thousands. Any related
question also is in thousands.
|
Flynn, Inc |
Macek Company |
||
|
Book Value |
Fair Value |
||
|
Cash |
$ 900 |
$ 80 |
$ 80 |
|
Receivables |
480 |
180 |
160 |
|
Inventory |
660 |
260 |
300 |
|
Land |
300 |
120 |
130 |
|
Buildings (net) |
1,200 |
220 |
280 |
|
Equipment |
360 |
100 |
75 |
|
Accounts payable |
480 |
60 |
60 |
|
Common stock |
1,000 |
340 |
|
|
Additional paid in capital |
1,200 |
80 |
|
|
Retained earnings |
1,080 |
480 |
|
Required: Compute the amounts requested . All answers must be in thousands
1. What is the amount of goodwill?
2. What is the amount will be reported for consolidated receivables?
3. What amount will be reported for consolidated cash?
4. What amount will be reported for consolidated common stock?
5. What amount will be reported for consolidated additional paid-in capital?
In: Accounting
Gundy Company expects to produce 1,304,400 units of Product XX
in 2020. Monthly production is expected to range from 87,000 to
127,000 units. Budgeted variable manufacturing costs per unit are:
direct materials $4, direct labor $7, and overhead $9. Budgeted
fixed manufacturing costs per unit for depreciation are $4 and for
supervision are $1.
In March 2020, the company incurs the following costs in producing
107,000 units: direct materials $455,000, direct labor $746,000,
and variable overhead $971,000. Actual fixed costs were equal to
budgeted fixed costs.
Prepare a flexible budget report for March. (List
variable costs before fixed costs.)
|
GUNDY COMPANY |
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|---|---|---|---|---|---|---|
|
Difference |
||||||
|
Budget |
Actual |
Favorable |
||||
| Select an opening flexible budget item
DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable CostsUnits Produced |
Enter a number | Enter a number | ||||
| Select an opening name for section one
DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable CostsUnits Produced |
||||||
| Select a flexible budget item
Depreciation Direct Labor Direct Materials Fixed Costs Overhead Supervision Total Costs Total Fixed Costs Total Variable Costs Variable Costs Units Produced |
$Enter a dollar amount | $Enter a dollar amount | $Enter the difference | Select an option
FavorableUnfavorableNeither Favorable nor Unfavorable |
||
| Select a flexible budget item
Depreciation Direct Labor Direct Materials Fixed Costs Overhead Supervision Total Costs Total Fixed Costs Total Variable Costs Variable Costs Units Produced |
Enter a dollar amount | Enter a dollar amount | Enter the difference | Select an option
FavorableUnfavorableNeither Favorable nor Unfavorable |
||
| Select a flexible budget item
Depreciation Direct Labor Direct Materials Fixed Costs Overhead Supervision Total Costs Total Fixed Costs Total Variable Costs Variable Costs Units Produced |
Enter a dollar amount | Enter a dollar amount | Enter the difference | Select an option
FavorableUnfavorableNeither Favorable nor Unfavorable |
||
| Select a closing name for section one
Depreciation Direct Labor Direct Materials Fixed Costs Overhead Supervision Total Costs Total Fixed Costs Total Variable Costs Variable Costs Units Produced |
$Enter a total amount for section one | $Enter a total amount for section one | $Enter the difference | Select an option
FavorableUnfavorableNeither Favorable nor Unfavorable |
||
| Select an opening name for section two
DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable CostsUnits Produced |
||||||
| Select a flexible budget item
Depreciation Direct Labor Direct Materials Fixed Costs Overhead Supervision Total Costs Total Fixed Costs Total Variable Costs Variable Costs Units Produced |
Enter a dollar amount | Enter a dollar amount | Enter the difference | Select an option
FavorableUnfavorableNeither Favorable nor Unfavorable |
||
| Select a flexible budget item
Depreciation Direct Labor Direct Materials Fixed Costs Overhead Supervision Total Costs Total Fixed Costs Total Variable Costs Variable Costs Units Produced |
Enter a dollar amount | Enter a dollar amount | Enter the difference | Select an option
FavorableUnfavorableNeither Favorable nor Unfavorable |
||
| Select a closing name for section two
Depreciation Direct Labor Direct Materials Fixed Costs Overhead Supervision Total Costs Total Fixed Costs Total Variable Costs Variable Costs Units Produced |
Enter a total amount for section two | Enter a total amount for section two | Enter the difference | Select an option
FavorableUnfavorableNeither Favorable nor Unfavorable |
||
| Select a closing flexible budget item
DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable CostsUnits Produced |
$Enter a total dollar amount | $Enter a total dollar amount | $Enter the difference | Select an option
FavorableUnfavorableNeither Favorable nor Unfavorable |
||
Were costs controlled? Select an option
YesNo
In: Accounting
resented below is information related to equipment owned by Windsor Company at December 31, 2020.
| Cost | $9,720,000 | |
| Accumulated depreciation to date | 1,080,000 | |
| Expected future net cash flows | 7,560,000 | |
| Fair value | 5,184,000 |
Windsor intends to dispose of the equipment in the coming year. It
is expected that the cost of disposal will be $21,600. As of
December 31, 2020, the equipment has a remaining useful life of 5
years.
Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
| Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
Dec. 31 |
enter an account title to record the transaction on December 31, 2017 |
enter a debit amount |
enter a credit amount |
|
enter an account title to record the transaction on December 31, 2017 |
enter a debit amount |
enter a credit amount |
eTextbook and Media
List of Accounts
Prepare the journal entry (if any) to record depreciation expense for 2021. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
|
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|
|
enter an account title |
enter a debit amount |
enter a credit amount |
|
enter an account title |
enter a debit amount |
enter a credit amount |
eTextbook and Media
List of Accounts
The asset was not sold by December 31, 2021. The fair value of the equipment on that date is $5,724,000. Prepare the journal entry (if any) necessary to record this increase in fair value. It is expected that the cost of disposal is still $21,600. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
| Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
Dec. 31 |
enter an account title to record the transaction on December 31, 2018 |
enter a debit amount |
enter a credit amount |
|
enter an account title to record the transaction on December 31, 2018 |
enter a debit amount |
enter a credit amount |
In: Accounting
On January 1, 2020, Tamarisk Company purchased $350,000, 8% bonds of Aguirre Co. for $322,973. The bonds were purchased to yield 10% interest. Interest is payable semiannually on July 1 and January 1. The bonds mature on January 1, 2025. Tamarisk Company uses the effective-interest method to amortize discount or premium. On January 1, 2022, TamariskCompany sold the bonds for $324,733 after receiving interest to meet its liquidity needs.
Prepare the journal entry to record the purchase of bonds on January 1. Assume that the bonds are classified as available-for-sale. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
| Jan. 1, 2020 | |||
eTextbook and Media
List of Accounts
Prepare the amortization schedule for the bonds. (Round answers to 0 decimal places, e.g. 1,250.)
|
Schedule of Interest Revenue and Bond Discount |
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|
|
Interest Receivable |
|
Bond |
Carrying |
||||
| 1/1/20 |
$ |
$ |
$ |
$ |
||||
| 7/1/20 | ||||||||
| 1/1/21 | ||||||||
| 7/1/21 | ||||||||
| 1/1/22 | ||||||||
| 7/1/22 | ||||||||
| 1/1/23 | ||||||||
| 7/1/23 | ||||||||
| 1/1/24 | ||||||||
| 7/1/24 | ||||||||
| 1/1/25 | ||||||||
| Total |
$ |
$ |
$ |
|||||
eTextbook and Media
List of Accounts
| (c) | Prepare the journal entries to record the semiannual interest on (1) July 1, 2020, and (2) December 31, 2020. | |
| (d) | If the fair value of Aguirre bonds is $326,733 on December 31, 2021, prepare the necessary adjusting entry. (Assume the fair value adjustment balance on December 31, 2020, is a debit of $3,212.) | |
| (e) | Prepare the journal entry to record the sale of the bonds on January 1, 2022. |
(Round answers to 0 decimal places, e.g. 2,500. Credit
account titles are automatically indented when amount is entered.
Do not indent manually. If no entry is required, select "No Entry"
for the account titles and enter 0 for the
amounts.)
|
No. |
Date |
Account Titles and Explanation |
Debit |
Credit |
||
|
(c) |
(1) |
|
||||
| (2) |
|
|||||
|
(d) |
July 1, 2020Dec. 31, 2020Dec. 31, 2021Jan. 1, 2022 |
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|
(e) |
|
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In: Accounting
The following transactions occurred during 2020 (the company uses a perpetual inventory system with FIFO):
1) Jan 4 Stockholders invested an additional $10,000 cash in the business in exchange for common stock
2) Jan 4 Purchased 20 rabbits at $50 each on account from Jelly Bean Farms.
3) Jan 4 Established a $200 petty change fund
4) Jan 5 Sold 6 rabbits for $200 each to Mr. Karrot, terms 2/10, n/30.
5) Jan 6 Sold 12 rabbits at $200 each for cash
6) Jan 8 Paid wages of $240
7) Jan 9 Mr. Karrot returned one rabbit because they originally ordered only 5.
8) Jan 12 Purchased equipment on account for $2,000
9) Jan 14 Received payment in full from Mr. Karrot
10) Jan 15 Purchased 10 rabbits at $52 each on account from Easter Industries, terms 1/10, n/30.
11) Jan 15 Paid utility bill of $120
12) Jan 16 Returned 2 rabbits to Easter Industries because they were defective.
13) Jan 17 Sold 8 rabbits for $245 each for cash
14) Jan 18 Paid tax bill from 2019.
15) Jan 18 Performed the service of rabbit grooming ($800 worth); we received the cash in 2019
16) Jan 19 Paid Accounts Payable in full from 2019
17) Jan 20 Received $2,200 cash from customers paying on their accounts
18) Jan 21 Received a bill from the local radio station for advertising in the amount of $400
19) Jan 22 Purchased 20 rabbits for $55 each on account from Eggs & Chicks Company; terms 2/5, n/30
20) Jan 23 Paid freight costs from Eggs & Chicks Company of $10.
21) Jan 25 Sold 10 rabbits to Bunny Tail Corporation for $260 each on account; terms 3/10, n/30
22) Jan 26 Received payment in full from Bunny Tail Corporation
23) Jan 27 Sold 10 rabbits to customers on credit for $260 each.
24) Jan 28 Paid Eggs & Chicks Company for the purchase on Jan 22
25) Jan 29 Petty cash was replenished and had the following receipts: gas receipt for $20, postage stamps for $39, Office Depot receipt for $16, miscellaneous receipt for $30, travel receipts for $40
26) Jan 30 Performed a physical inventory count and count only 1 rabbit on hand.
27) Jan 30 Bank statement arrives today and there is a $20 bank service charge as well as a $120 NSF check.
28) Jan 31 One month’s prepaid insurance needs to be expensed for January ($1,200 is for the whole year)
29) Jan 31 Depreciate one month’s worth of the building and equipment (Using straight line method; building has a useful life of 20 years, equipment has a useful life of 5 years and no salvage value)
30) Jan 31 The estimated bad debt expense under the percentage of sales basis is $120.
31) Jan 31 Paid dividends of $500
What would the journal entries be for Jan 16,18,19,30 and 31st??? Numbers 12, 14, 15, 16, 26, 27, 29, 30?
In: Accounting
The shareholders’ equity of Core Technologies Company on June 30, 2020, included the following: Common stock, $1 par; authorized, 6 million shares; issued and outstanding, 2 million shares $ 2,000,000 Paid-in capital—excess of par 8,000,000 Retained earnings 9,000,000
On April 1, 2021, the board of directors of Core Technologies declared a 10% stock dividend on common shares, to be distributed on June 1. The market price of Core Technologies’ common stock was $22 on April 1, 2021, and $32 on June 1, 2021.
Required: Complete the below table to calculate the stock dividend. Prepare the journal entries to record the declaration and distribution of the stock dividend.
Complete the below table to calculate the stock dividend.
|
In: Accounting
The shareholders’ equity of Core Technologies Company on June
30, 2020, included the following:
| Common stock, $1 par; authorized, 8 million shares; issued and outstanding, 4 million shares |
$ | 4,000,000 | |
| Paid-in capital—excess of par | 12,000,000 | ||
| Retained earnings | 34,000,000 | ||
On April 1, 2021, the board of directors of Core Technologies
declared a 25% stock dividend on common shares, to be distributed
on June 1. The market price of Core Technologies’ common stock was
$30 on April 1, 2021, and $40 on June 1, 2021.
Required:
1. Prepare the journal entry to record the stock dividend if the
company treats the distribution as normal stock dividends.
2. Prepare the journal entry to record the stock dividend if the company treats the distribution as "large" stock dividends effected in the form of a stock dividend.
3. Prepare the journal entry to record the stock dividend if the company treats the distribution as a stock split.
In: Accounting
On January 1, 2020, the ledger of Bramble Company contains the
following liability accounts.
| Accounts Payable | $51,000 | |
| Sales Taxes Payable | 9,000 | |
| Unearned Service Revenue | 16,500 |
During January, the following selected transactions
occurred.
| Jan. 5 | Sold merchandise for cash totaling $20,520, which includes 8% sales taxes. | |
| 12 | Performed services for customers who had made advance payments of $10,000. (Credit Service Revenue.) | |
| 14 | Paid state revenue department for sales taxes collected in December 2019 ($9,000). | |
| 20 | Sold 900 units of a new product on credit at $50 per unit, plus 8% sales tax. This new product is subject to a 1-year warranty. | |
| 21 | Borrowed $27,000 from Girard Bank on a 3-month, 8%, $27,000 note. | |
| 25 |
Sold merchandise for cash totaling $9,828, which includes 8% sales taxes. Journalize the January transactions. (Credit account
titles are automatically indented when amount is entered. Do not
indent manually. Record journal entries in the order presented in
the problem.) |
In: Accounting