Questions
Problem 12-26 Close or Retain a Store [LO12-2] Superior Markets, Inc., operates three stores in a...

Problem 12-26 Close or Retain a Store [LO12-2]

Superior Markets, Inc., operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below:

Superior Markets, Inc.
Income Statement
For the Quarter Ended September 30
Total North
Store		 South
Store		 East
Store
Sales $ 4,100,000 $ 860,000 $ 1,640,000 $ 1,600,000
Cost of goods sold 2,255,000 515,000 860,000 880,000
Gross margin 1,845,000 345,000 780,000 720,000
Selling and administrative expenses:
Selling expenses 839,000 242,400 320,500 276,100
Administrative expenses 438,000 117,000 167,400 153,600
Total expenses 1,277,000 359,400 487,900 429,700
Net operating income (loss) $ 568,000 $ (14,400 ) $ 292,100 $ 290,300

The North Store has consistently shown losses over the past two years. For this reason, management is giving consideration to closing the store. The company has asked you to make a recommendation as to whether the store should be closed or kept open. The following additional information is available for your use:

  1. The breakdown of the selling and administrative expenses that are shown above is as follows:

Total North
Store		 South
Store		 East
Store
Selling expenses:
Sales salaries $ 263,400 $ 69,600 $ 80,600 $ 113,200
Direct advertising 176,000 62,000 83,000 31,000
General advertising* 61,500 12,900 24,600 24,000
Store rent 280,000 80,000 113,000 87,000
Depreciation of store fixtures 21,500 5,700 7,100 8,700
Delivery salaries 24,300 8,100 8,100 8,100
Depreciation of delivery
equipment		 12,300 4,100 4,100 4,100
Total selling expenses $ 839,000 $ 242,400 $ 320,500 $ 276,100

*Allocated on the basis of sales dollars.

Total North
Store		 South
Store		 East
Store
Administrative expenses:
Store managers' salaries $ 86,500 $ 26,500 $ 35,500 $ 24,500
General office salaries* 61,500 12,900 24,600 24,000
Insurance on fixtures and inventory 36,000 10,800 14,500 10,700
Utilities 86,145 27,735 29,480 28,930
Employment taxes 65,355 17,565 22,320 25,470
General office—other* 102,500 21,500 41,000 40,000
Total administrative expenses $ 438,000 $ 117,000 $ 167,400 $ 153,600

*Allocated on the basis of sales dollars.

  1. The lease on the building housing the North Store can be broken with no penalty.

  2. The fixtures being used in the North Store would be transferred to the other two stores if the North Store were closed.

  3. The general manager of the North Store would be retained and transferred to another position in the company if the North Store were closed. She would be filling a position that would otherwise be filled by hiring a new employee at a salary of $11,900 per quarter. The general manager of the North Store would continue to earn her normal salary of $12,900 per quarter. All other managers and employees in the North store would be discharged.

  4. The company has one delivery crew that serves all three stores. One delivery person could be discharged if the North Store were closed. This person’s salary is $5,100 per quarter. The delivery equipment would be distributed to the other stores. The equipment does not wear out through use, but does eventually become obsolete.

  5. The company pays employment taxes equal to 15% of their employees' salaries.

  6. One-third of the insurance in the North Store is on the store’s fixtures.

  7. The “General office salaries” and “General office—other” relate to the overall management of Superior Markets, Inc. If the North Store were closed, one person in the general office could be discharged because of the decrease in overall workload. This person’s compensation is $6,450 per quarter.

Required:

2. How much employment taxes will the company avoid if it closes the North Store?

In: Accounting

Problem 12-26 Close or Retain a Store [LO12-2] Superior Markets, Inc., operates three stores in a...

Problem 12-26 Close or Retain a Store [LO12-2]

Superior Markets, Inc., operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below:

Superior Markets, Inc.
Income Statement
For the Quarter Ended September 30
Total North
Store		 South
Store		 East
Store
Sales $ 4,100,000 $ 860,000 $ 1,640,000 $ 1,600,000
Cost of goods sold 2,255,000 515,000 860,000 880,000
Gross margin 1,845,000 345,000 780,000 720,000
Selling and administrative expenses:
Selling expenses 839,000 242,400 320,500 276,100
Administrative expenses 438,000 117,000 167,400 153,600
Total expenses 1,277,000 359,400 487,900 429,700
Net operating income (loss) $ 568,000 $ (14,400 ) $ 292,100 $ 290,300

The North Store has consistently shown losses over the past two years. For this reason, management is giving consideration to closing the store. The company has asked you to make a recommendation as to whether the store should be closed or kept open. The following additional information is available for your use:

  1. The breakdown of the selling and administrative expenses that are shown above is as follows:

Total North
Store		 South
Store		 East
Store
Selling expenses:
Sales salaries $ 263,400 $ 69,600 $ 80,600 $ 113,200
Direct advertising 176,000 62,000 83,000 31,000
General advertising* 61,500 12,900 24,600 24,000
Store rent 280,000 80,000 113,000 87,000
Depreciation of store fixtures 21,500 5,700 7,100 8,700
Delivery salaries 24,300 8,100 8,100 8,100
Depreciation of delivery
equipment		 12,300 4,100 4,100 4,100
Total selling expenses $ 839,000 $ 242,400 $ 320,500 $ 276,100

*Allocated on the basis of sales dollars.

Total North
Store		 South
Store		 East
Store
Administrative expenses:
Store managers' salaries $ 86,500 $ 26,500 $ 35,500 $ 24,500
General office salaries* 61,500 12,900 24,600 24,000
Insurance on fixtures and inventory 36,000 10,800 14,500 10,700
Utilities 86,145 27,735 29,480 28,930
Employment taxes 65,355 17,565 22,320 25,470
General office—other* 102,500 21,500 41,000 40,000
Total administrative expenses $ 438,000 $ 117,000 $ 167,400 $ 153,600

*Allocated on the basis of sales dollars.

  1. The lease on the building housing the North Store can be broken with no penalty.

  2. The fixtures being used in the North Store would be transferred to the other two stores if the North Store were closed.

  3. The general manager of the North Store would be retained and transferred to another position in the company if the North Store were closed. She would be filling a position that would otherwise be filled by hiring a new employee at a salary of $11,900 per quarter. The general manager of the North Store would continue to earn her normal salary of $12,900 per quarter. All other managers and employees in the North store would be discharged.

  4. The company has one delivery crew that serves all three stores. One delivery person could be discharged if the North Store were closed. This person’s salary is $5,100 per quarter. The delivery equipment would be distributed to the other stores. The equipment does not wear out through use, but does eventually become obsolete.

  5. The company pays employment taxes equal to 15% of their employees' salaries.

  6. One-third of the insurance in the North Store is on the store’s fixtures.

  7. The “General office salaries” and “General office—other” relate to the overall management of Superior Markets, Inc. If the North Store were closed, one person in the general office could be discharged because of the decrease in overall workload. This person’s compensation is $6,450 per quarter.

Required:

4. Assuming that the North Store's floor space can’t be subleased, would you recommend closing the North Store?

In: Accounting

Problem 12-26 Close or Retain a Store [LO12-2] Superior Markets, Inc., operates three stores in a...

Problem 12-26 Close or Retain a Store [LO12-2]

Superior Markets, Inc., operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below:

Superior Markets, Inc.
Income Statement
For the Quarter Ended September 30
Total North
Store		 South
Store		 East
Store
Sales $ 4,100,000 $ 860,000 $ 1,640,000 $ 1,600,000
Cost of goods sold 2,255,000 515,000 860,000 880,000
Gross margin 1,845,000 345,000 780,000 720,000
Selling and administrative expenses:
Selling expenses 839,000 242,400 320,500 276,100
Administrative expenses 438,000 117,000 167,400 153,600
Total expenses 1,277,000 359,400 487,900 429,700
Net operating income (loss) $ 568,000 $ (14,400 ) $ 292,100 $ 290,300

The North Store has consistently shown losses over the past two years. For this reason, management is giving consideration to closing the store. The company has asked you to make a recommendation as to whether the store should be closed or kept open. The following additional information is available for your use:

  1. The breakdown of the selling and administrative expenses that are shown above is as follows:

Total North
Store		 South
Store		 East
Store
Selling expenses:
Sales salaries $ 263,400 $ 69,600 $ 80,600 $ 113,200
Direct advertising 176,000 62,000 83,000 31,000
General advertising* 61,500 12,900 24,600 24,000
Store rent 280,000 80,000 113,000 87,000
Depreciation of store fixtures 21,500 5,700 7,100 8,700
Delivery salaries 24,300 8,100 8,100 8,100
Depreciation of delivery
equipment		 12,300 4,100 4,100 4,100
Total selling expenses $ 839,000 $ 242,400 $ 320,500 $ 276,100

*Allocated on the basis of sales dollars.

Total North
Store		 South
Store		 East
Store
Administrative expenses:
Store managers' salaries $ 86,500 $ 26,500 $ 35,500 $ 24,500
General office salaries* 61,500 12,900 24,600 24,000
Insurance on fixtures and inventory 36,000 10,800 14,500 10,700
Utilities 86,145 27,735 29,480 28,930
Employment taxes 65,355 17,565 22,320 25,470
General office—other* 102,500 21,500 41,000 40,000
Total administrative expenses $ 438,000 $ 117,000 $ 167,400 $ 153,600

*Allocated on the basis of sales dollars.

  1. The lease on the building housing the North Store can be broken with no penalty.

  2. The fixtures being used in the North Store would be transferred to the other two stores if the North Store were closed.

  3. The general manager of the North Store would be retained and transferred to another position in the company if the North Store were closed. She would be filling a position that would otherwise be filled by hiring a new employee at a salary of $11,900 per quarter. The general manager of the North Store would continue to earn her normal salary of $12,900 per quarter. All other managers and employees in the North store would be discharged.

  4. The company has one delivery crew that serves all three stores. One delivery person could be discharged if the North Store were closed. This person’s salary is $5,100 per quarter. The delivery equipment would be distributed to the other stores. The equipment does not wear out through use, but does eventually become obsolete.

  5. The company pays employment taxes equal to 15% of their employees' salaries.

  6. One-third of the insurance in the North Store is on the store’s fixtures.

  7. The “General office salaries” and “General office—other” relate to the overall management of Superior Markets, Inc. If the North Store were closed, one person in the general office could be discharged because of the decrease in overall workload. This person’s compensation is $6,450 per quarter.

Required:

3. What is the financial advantage (disadvantage) of closing the North Store?

In: Accounting

On December 31, 2020, Pronghorn Inc. rendered services to Beghun Corporation at an agreed price of...

On December 31, 2020, Pronghorn Inc. rendered services to Beghun Corporation at an agreed price of $120,418, accepting $47,200 down and agreeing to accept the balance in four equal installments of $23,600 receivable each December 31. An assumed interest rate of 11% is imputed.

Prepare an amortization schedule. Assume that the effective-interest method is used for amortization purposes. (Round answers to 0 decimal places, e.g. 5,275.)

December 31, 2020
Schedule of Note Discount Amortization


Date

Cash
Received

Interest
Revenue

Discount
Amortized

Carrying
Amount of Note
12/31/20 $ $ $ $
12/31/21
12/31/22
12/31/23
12/31/24

eTextbook and Media

List of Accounts

  

  

Prepare the entries that would be recorded by Pronghorn Inc. for the sale on December 31, 2020. (Round answers to 0 decimal places, e.g. 5,275. 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 the amount is entered. Do not indent manually.)

Account Titles and Explanation

Debit

Credit

eTextbook and Media

List of Accounts

  

  

Prepare the entries that would be recorded by Pronghorn Inc. for the (a) receipts and (b) interest on December 31, 2021. (Round answers to 0 decimal places, e.g. 5,275. 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 the amount is entered. Do not indent manually.)

No.

Account Titles and Explanation

Debit

Credit
(a)
(b)

eTextbook and Media

List of Accounts

  

  

Prepare the entries that would be recorded by Pronghorn Inc. for the (a) receipts and (b) interest on December 31, 2022. (Round answers to 0 decimal places, e.g. 5,275. 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 the amount is entered. Do not indent manually.)

No.

Account Titles and Explanation

Debit

Credit
(a)
(b)

eTextbook and Media

List of Accounts

  

  

Prepare the entries that would be recorded by Pronghorn Inc. for the (a) receipts and (b) interest on December 31, 2023. (Round answers to 0 decimal places, e.g. 5,275. 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 the amount is entered. Do not indent manually.)

No.

Account Titles and Explanation

Debit

Credit
(a)
(b)

eTextbook and Media

List of Accounts

  

  

Prepare the entries that would be recorded by Pronghorn Inc. for the (a) receipts and (b) interest on December 31, 2024. (Round answers to 0 decimal places, e.g. 5,275. 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 the amount is entered. Do not indent manually.)

In: Accounting

What is the amount that Dan would have to pay Lachlan so that each received half of the total extra gains from chopping down the tree?

Lachlan has a Jacaranda growing in his yard. One of the tree limbs is growing over into Dan’s property. Dan does not like this and wants Lachlan to chop down the tree. Their respective benefits are shown below:

   Keeping Tree Chopping Down Tree

Gains to Lachlan ($) 1000    500

Gains to Dan ($)    100    1,006

Total ($) 1100

What is the amount that Dan would have to pay Lachlan so that each received half of the total extra gains from chopping down the tree? Answer to the nearest whole number in dollars (with no decimal places, $ sign, spaces or commas).

In: Economics

You plan to take out a $700,000 mortgage for 30 years with monthly payments. If you...

  1. You plan to take out a $700,000 mortgage for 30 years with monthly payments.
    1. If you don’t have a down payment, they will offer you an interest rate of 5.7%. If you can make a down payment of at least $20,000 they will lower the interest rate to 5.2%. Calculate the monthly payment for each loan.
      1. You would like to see how long it will take you to come up with a down payment. You already have $6,000 and can put away $500 every quarter at 4% interest compounded quarterly. How long will it take you to save up to $20,000?

In: Advanced Math

Q1 The moment of inertia of a certain wheel about its axle is ?/? mR^2. The...

Q1 The moment of inertia of a certain wheel about its axle is ?/? mR^2. The translational
speed of its axle after it starts from rest and rolls without slipping down an inclined
plane 2.13 m high is ?? I know the answe is 4.88m/s


A uniform cylinder (I =?/?mR^2) of diameter 0.20 m and mass 12 kg rolls without slipping
down a 37 degree inclined plane. The gain in translational kinetic energy of the cylinder
when it has rolled 5 m down the incline of the plane is approximately… ??? I know the answer is 3.9


In: Physics

Alexi's bought a home for $1,000,000 during year 1. She made a $200,000 down payment and...

Alexi's bought a home for $1,000,000 during year 1. She made a $200,000 down payment and financed the other $800,000. This home is her only residence. Assume that by year 10 her home had appreciated to $1,5000,000 and the balance on her mortgage was down to $600,000, interest rates had gone down and Alexis refinanced her home. She borrowed $1,000,000 and paid off her first mortgage. She used the remaining $400,000 for projects unrelated to her home. How much is her qualifying home-related debt for tax purposes?

The country its been taxed on is irrelevant

In: Accounting

Explain the working principle of the rotary vane and ram type steering gear systems. Write down...

  1. Explain the working principle of the rotary vane and ram type steering gear systems. Write down all tests and controls are to be done related to steering gear. Explain why emergency steering operation drills are carried out on board and write down the emergency steering procedures. Write down the possible reasons, results and solutions of the following problems :
  • Oil leakages,
  • Difference in the actual rudder angle and ordered helm angle,
  • Excessive noise from steering gear,
  • High oil temperature,

No steering from remote control

I NEED GOOD ANSWER AND WRİTE WORD

In: Mechanical Engineering

At the beach, some waves with wavelength of 100 m propagate towards the shore at a...

At the beach, some waves with wavelength of 100 m propagate towards the shore at a speed of 12.5 m/s. (c) Does the engine sound higher- or lower-pitched to someone standing on the shore, compared with the experience of people on the boat?

(a) Calculate the frequency that boat anchored near shore bobs up and down as the waves roll in.

(b) At what frequency the boat would bob up and down with if it were headed away from the shore at a speed of 4.8 m/s?

(c) At what frequency the boat would bob up and down with if it were headed toward the shore at a speed of 4.8 m/s?

In: Physics