Chemco Enterprises is the manufacturer of Ultra-Dry, a hydrophobic coating that will waterproof anything. Over a 5-year period, the costs associated with the pilot test product line were as follows: first cost of $42,000 and annual costs of $18,000. Annual revenue was $27,000 and used equipment was salvaged for $4,000. What rate of return did the company make on this product?

The rate of return the company made on the product is ____________ %.

Question 2. Suppose you are in charge of sales at a pharmaceutical company, and your firm has a new drug that causes bald men to grow hair. Assume that the company wants to earn as much revenue as possible from this drug. If the elasticity of demand for your company’s product at the current price is 1.4, would you advise the company to raise the price, lower the price, or to keep the price the same? What if the elasticity were 0.6? What if it were 1? Explain your answer with diagram.

On January 1, 2021, a company acquires $540,000 of another company’s 7% bonds at a price of $410,000. For the investor company, interest is received on January 1 of each year, and the bonds mature on January 1, 2031. The investment will provide the investor a 10% yield (assumed for ease of computation; do not attempt computation beyond the years necessary). The bonds are classified as held-to-maturity. Using the effective interest method, what is the amount the investor company will record for Interest Revenue for the year ended 12/31/2022?

Fill in the appropriate blanks for each of the independent situations below.

Company A Company B Company C

Sales revenue (a) $_______ $343,400 $540,000

Beginning inventory 52,600 (d) _______ 90,000

Net purchases 205,300 255,600 (g) _______

Ending inventory 52,200 108,000 63,000

Cost of goods sold (b) ______   (e) _______ 437,000

Gross profit 75,300 128,000 (h) _______

Operating expenses (c) ____ 50,000 48,000

Income before taxes 6,000 (f) _______ (i) _______

(Show me all the calculations please)

Q.3 . Products A, B, and C are produced from a single raw material input. The raw  mat-

         erial and other production costs up to the split-off point are $100,000, from which

         10,000 units of Product A, 15,000 units of Product B, and 10,000 units of Product C

         can be produced each period.

         At split-off point, selling prices are as follows:

              - Product A $2 per unit

              - Product B $3 per unit

              - Product C $5 per unit.

        The Company has been offered the following options:

                             Further processing costs totals |                  New  selling prices are :

              -  Product    A        $25,000                       |                   $4.75 per unit

              -  Product    B        $22,500                       |                   $5.00 per unit

              -  Product    C        $25,000                       |                   $8.00 per unit.

1. Determine:Which products should be sold at split-off and which should be processed further.   Show calculations and explain your reasoning. Be Specific!

Selling Price at Split-Off   + [ Incremental Revenue   -  Incremental Cost ]  Net +/-

2.         The company has the option to combine Product A and Product C, at an additional

             cost of  $12,500 to combine both products,  and sell the resulting package  as a

             novelty called “ AC2 Bundle” for $14 per package.

Required: As Management Accountant of this company please recommend :

    Should the company produce and sell the” AC2 Bundle”? What is the minimum     

    price at which the AC2 Bundle should be sold. Show calculations and  explain.

Nuncio Consulting completed the following transactions during June

a.

Nuncio, the owner, invested $35,000 cash along with office equipment valued at $11,000 in the

new company.

b. The company purchased land valued at $ 7,500 and a building valued at $40,000. The purchase

is paid with $15,000 cash and a long-term note payable for $32,500

c.

The company purchased $500 of office supplies on credit

d. Nuncio invested his personal automobile in the company. The automobile has a value of $8,000

and is to be used exclusively in the business.

e. The company purchased $1,200 of additional office equipment on credit

f.

The company paid $1,000 cash salary to an assistant

g.

The company provided services to a client and collected $3,200 cash

h. The company paid $540 cash for this month’s utilities

i.

The company paid $500 cash to settle the payable created in transaction

c

j.

The company purchased $3,400 of new office equipment by paying $3,400 cash

k.

The company paid $1,000 cash salary to an assistant

l.

The company received $2,200 cash in partial payment on the receivable created in transaction

k

m. Nuncio withdrew $1,100 cash from the company for personal use

REQUIRED

1. Make journal entries to record the transactions above.

2. Open Ledger accounts to record the above transactions; ( use: Cash , AR, Office Supplies,

Office Equipment, Automobiles, Buildings, Land, AP, Notes Payable, Capital, Withdrawals,

Revenue Earned, Salaries Expense, and Utilities Expense)

3. Balance the Accounts and Extract a Trial Balance as of the end of June

Use the following information about the current year's operations of a company to calculate the cash received from customers.  

In our chapter reading this week, we learn more about setting up a sample company in QuickBooks Online. We explore how to customize a chart of accounts, explore lists, and navigate the various areas for customers, vendors and employees. Which feature do you like most so far in your navigation of QuickBooks Online?