Sylvia Sweet opened Sweet Angels, Inc. on June 1, 2020. During June, the following transactions were completed:

Adjustment Data:

A. Services performed for customers through June 30, 2020, but unbilled and uncollected were $1,500.

B. Cleaning Angels used the allowance method to estimate bad debts. Cleaning Angels estimates that 3% of its month-end receivables will not be collected.

C. Record 1 month of depreciation for the floor equipment. Use the straight-line method, an estimated life of 5 years, and $400 salvage value.

D. Record 1 month of insurance expense.

E. An inventory count shows $350 of supplies on hand at June 30th.

F. Record services performed for the customer who paid in advance on June 17th.

G, Accrue for wages owed through June 30, 2020.

H. Accrue for interest expense for one month.

I. Sylvia estimates a 20% income tax rate. (Hint: Prepare an income statement up to “income before taxes” to help with the income tax calculation.)

Instructions:

1. Journalize the June transactions.
2. Post to ledger accounts.
3. Prepare a Trial Balance as of June 30, 2020.
4. Journalize the adjusting entries. (Round all amounts to whole dollars.)
5. Post the adjusting entries to the ledger accounts.
6. Prepare an Adjusted Trial Balance as of June 30, 2020.
7. Journalize the closing entries.
8. Post the Closing Entries to the ledger accounts.
9. Prepare a Post-Closing Trial Balance on June 30, 2020

Central City levies taxes of $950,000 in 2019. It collects $ 600,000 of this in 2019, $180,000 in February 2020, $120,000 in May 2020 and the remaining in February 2021. The fiscal year of the City ends on December 31. In 2019, the city will recognize tax revenues at the governmental activities level of:

$600,000

$780,000

$900,000

$950,000

Hops Co. purchased a copyright from Wall Co. for $40,000 on July 1, 2017. Expenditures of $17,000 for unsuccessful litigation in defense of the copyright were paid on July 1, 2020. Hops estimated that the useful life of the copyright will be 20 years from the date of acquisition.

What is the 2020 amortization expense?

Consider the following in Euclidean geometry: Suppose that you want to translate a figure in the coordinate plane along the vector ( 0 2020 ). Find, with a brief explanation, the equations of two lines in the coordinate plane (call them ℓ and m) such that ρ m ∘ ρ ℓ is a translation along the vector ( 0 2020 ).

1. Scopus Team Ltd is a treadmill specialist currently reviewing its product lines, accessories and the prospect of outsourcing few of them. As a part of this process, the CEO of the firm has appointed you as a consultant and you have chosen their treadmill product line for the possibility of outsourcing.

The company sells 22,000 of treadmills annually of two models (ZR & SQ) and their factories are located in Kent and Hull respectively. The Hull Division is their flagship unit that showcases the company’s investment in the Clean & Environment-friendly Fuel source as the division is completely run by bio-energy. The accountant of the company has provided the following information relating to the production and distribution costs of one unit of the various models of the treadmill:

An external supplier has offered to supply the same quality of ZR & SQ for £150 and £200 respectively. However, if the company accepts the offer, the following information should be taken into consideration:

1. 85% of material costs and 80% of labour costs will be saved if external supplier’s offers are accepted. The company would be able to save all variable manufacturing overhead
2. More warehouse spaces will be required in Kent for £15,000 per month in order to stock the products delivered from the external supplier; however, Hull Division has spare storage capacity for ZR series if required.
3. All of the fixed selling and administrative costs and 35% of the fixed manufacturing overhead costs are allocated costs (common costs).
4. Production supervisor’s job will be terminated. Her salary represents 25% of the fixed manufacturing cost. The rest of the fixed manufacturing overhead costs (i.e. excluding allocated costs and production supervisor’s salary) is the depreciation of machines. The external supplier has promised to pay 75% of the resale value of the machines if their offer is accepted.
5. Since customers’ order and delivery of the treadmills to customers will be responsibility of the Scopus, the company will continue paying 80% of the variable selling and administrative costs.

Required:

1. As a management consultant, prepare a report for the CEO that may help her to resolve the issue. In your report, you should apply an appropriate management accounting technique, concept(s) and/or theory. You must show detailed computation and elaborate concepts and theory that are important to manager since she does not have any background in management accounting.
2. Identify irrelevant costs and/or revenues in the above calculation and explain why they are irrelevant.                   
3. What would be the maximum price acceptable to Scopus to justify outsourcing their production from the external supplier? Show your computation
4. Would you change your decision if the external supplier delivers directly to customer and no additional storage capacity required for the Kent Division? Show necessary computation that support your argument.
5. Critically evaluate what additional qualitative factors the company should consider in deciding whether to make or buy the product from outside suppliers.
6. What additional information you might seek from the company accountant to make a better decision? Discuss your information requirements and their importance in this context.

The cost of equipment purchased by Waterway, Inc., on June 1, 2020, is $102,900. It is estimated that the machine will have a $10,500 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 46,200, and its total production is estimated at 616,000 units. During 2020, the machine was operated 7,200 hours and produced 66,000 units. During 2021, the machine was operated 6,600 hours and produced 57,600 units.

Compute depreciation expense on the machine for the year ending December 31, 2020, and the year ending December 31, 2021, using the following methods. (Round depreciation per unit to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 45,892.)

The cost of equipment purchased by Bramble, Inc., on June 1, 2020, is $92,400. It is estimated that the machine will have a $8,400 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 42,000, and its total production is estimated at 600,000 units. During 2020, the machine was operated 6,900 hours and produced 63,200 units. During 2021, the machine was operated 6,320 hours and produced 55,200 units.

Compute depreciation expense on the machine for the year ending December 31, 2020, and the year ending December 31, 2021, using the following methods. (Round depreciation per unit to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 45,892.)

a. Make the necessary journal entries for the following transactions:

i. On 1 April 2020, Mr Syed has invested $20,000 cash to set up a restaurant business called Nasi Kandar Penang.

ii. On 2 April 2020 Nasi Kandar restaurant purchased cooking utensils costing $8,000 by signing a 2-month, 12%, $8,000 note payable.

iii. On 8 April the restaurant received $3,000 cash from a client as a down payment for an event that is expected to be held on 15 May 2020.

iv. On 9 April Mr Syed paid rental for the business premise for the month of April, $1,000.

v. On the same day, Mr Syed paid $1,200 for a one-year business insurance policy which will expire on 10 March 2021.

b. Post each of the above entry to the respective accounts in the general=al ledger.

c. Prepare a trial balance at 30 April 2020.

The cost of equipment purchased by Sheffield, Inc., on June 1, 2020, is $100,800. It is estimated that the machine will have a $8,400 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 46,200, and its total production is estimated at 660,000 units. During 2020, the machine was operated 7,080 hours and produced 64,900 units. During 2021, the machine was operated 6,490 hours and produced 56,600 units. Compute depreciation expense on the machine for the year ending December 31, 2020, and the year ending December 31, 2021, using the following methods. (Round depreciation per unit to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 45,892.) 2020 2021 (a) Straight-line $ $ (b) Units-of-output $ $ (c) Working hours $ $ (d) Sum-of-the-years'-digits $ $ (e) Double-declining-balance (twice the straight-line rate) $ $