Given the information below, complete the following requirements:

A. Rank the customers by their gross margin as a percent of sales revenue.

B. Perform customer profitability analysis by generating an operating income for each customer segment through the use of activity-based costing.

C. Rank segments by their respective operating income as a percent of sales.

D. If the relative rankings of the segments using operating income as a percent of sales is different from the relative rankings using gross margin as a percent of sales, then provide two reasons why this change might have occurred.

Space is provided on the following two pages for your answer. Be sure to show your work for partial credit should you make an error.

Pharmacy

Hospital

HMO

Clinics

Revenue

$1,000,000

$1,200,000

$800,000

$600,000

CGS

$670,000

$720,000

$560,000

$390,000

Activity

Rate

Cost Driver

Order taking

$200.00

per purchase order

Information requests

$350.00

per request

Sales calls

$400.00

per sales call

Distribution

$150.00

per delivery

Expedited orders

$500.00

per expedited order

Activity Cost Driver Quantities

Activity Cost Driver

Pharmacy

Hospital

HMO

Clinics

Number of purchase orders

100

200

20

80

Number of requests

50

100

20

20

Number of sales calls

50

200

10

40

Number of deliveries

80

100

10

40

Number of expedited orders

40

150

8

60

Case

Azzahra is a book publisher, publishes and distributes educational and non-educational books and sell them to libraries and bookstores within Saudi Arabia and in the Arabian Gulf Region (AGR).

Azzahra employs a professional editorial team. All printing and binding activities are outsourced. The annual revenue total 250 millions Saudi Riyals which are disbursed as follows:

Cash expenditures are 150 million Saudi Riyals. Non-cash expenditures are 50 million Saudi Riyals. While revenues may be paid in different currencies, all processed out in the main center in Riyadh and using Saudi Riyal.

Requirement

Suppose you are a member of the professional editorial team and your task is to audit the revenue and accounts receivable. You probably would like to perform your audit in the following order:

1- Establish audit objectives

2- Determine the scope of the audit

3- Apply the Seven Habits of Highly Effective People (expected outcomes).

4- Understand the auditee (gather relevant information, analytical procedures, control

analysis, process flow, process risks)

5- Identify and assess risks

6- Identify key controls

7- Evaluate controls

8- Create test plan

9- Develop work program

10- Gather evidences

11- Evaluate evidences and reach conclusion

12- Develop observation and formulate recommendation.

Gulf Delivery Service, Inc. completed the following transactions during January, 2018:

1Shareholders invested in the business $25,000 cash and a delivery truck valued at $35,000 in exchange for common stock.

2.Purchased supplies for $1,000 cash.

3.Paid $2,400 for a one-year insurance policy, effective January1.

3.Performed delivery services for a customer and received $2,500 cash.

4.Completed a large delivery job for a customer on account for $8,000.

5.Paid $6,000 for employee salaries.

6.Performed delivery services for customers and received $55,000 cash.

7.Collected $4,000 in advance for delivery service to be performed later.

8.Collected $3,000 cash from a customer on account.

9.Purchased fuel for the truck , paying $1,500 with a company credit card (Credit accounts payable).

10.Performed delivery services on account, $4,500.

11.Paid office rent $2,500.

12.Paid $500 for accounts payable.

13.Paid cash dividends of $10,000.

a.

Record each transaction in the journal. Key each transaction by its letter (Explanations are not required).

b.Post the transactions that you recorded in requirement 1 to the ledger accounts using T-accounts. The ledger for Gulf Delivery Service contains the following accounts:

Cash                                                    Service revenue

Accounts receivable                            Salaries expense

Supplies                                               Depreciation expense

Prepaid insurance                                Insurance expense

Delivery truck                                     Fuel expense

Accumulated depreciation                  rent expense

Accounts payable                                supplies expense

Salaries payable                                              

Unearned service revenue

Common stock

Retained earnings

Dividends

Income summary

Laundromat is trying to enhance the services it provides to? customers, mostly college students. It is looking into the purchase of new? high-efficiency washing machines that will allow for the? laundry's status to be checked via smartphone.

FulmarFulmar

estimates the cost of the new equipment at

$178,000.

The equipment has a useful life of 9 years.

FulmarFulmar

expects cash fixed costs of

$80,000

per year to operate the new? machines, as well as cash variable costs in the amount of

15%

of revenues.

FulmarFulmar

evaluates investments using a cost of capital of

6?%.

Requirement 1. Calculate the payback period and the discounted payback period for this? investment, assuming

FulmarFulmar

expects to generate

$ 190 comma 000$190,000

in incremental revenues every year from the new machines.? (Round your answer to two decimal? places.)

Requirements:

Additional Information:

i   Rent expires (is used up) at a rate of $700 per month.

ii   Monthly depreciation on equipment is $300.

iii   Interest on the 6 per cent promissory note is paid quarterly on
1 April, 1 July, 1 October and 1 January.

iv   Performed services for which payment was received in April– $800.

v   Received electricity bill to be paid next month – $500.

vi   Services to customers earned during June but unrecorded at 30 June, $2500

. vii   Supplies on hand totaled $1500 at 30 June. viii Owed employees for salaries for the last week of June to be
paid in July – $800

. ix   Prime Realty prepares adjusting entries each quarter adjustments were last made on 31 march

Required
a   Prepare all adjusting journal entries for the quarter ending 30 June.
b   Post journal entries to T-accounts using totals on the unadjusted trial balance as the opening balances

c   Prepare an adjusted trial balance as of 30 June

The POL Company had started its operations in 2016. The balance sheet for December 31, 2016, showed the following accounts balances (there were no other accounts listed):

Accounts receivables 45

Unearned revenue 40

Accumulated depreciation 10

Common stock 500

Retained earnings 57

Property plant and equipment (gross) 200

Inventory 75

Accounts payable 40

Cash 309

Prepaid rent ______

During 2017 the following transactions occurred:

1. POL purchased $375 worth of inventory on account.

2.Payments on Accounts payable were $365.

3.Cash sales were $260; credit sales were $360.

4.Ending inventory was $59.

5.Depreciation expense was $20.

6.Collections from customers (not including cash sales) were $312.

7. The Prepaid rent had expired during the year.

8. POL hired one employee, who worked for the entire year at $4 per month. At the end of the year, POL owes its employee $6.

9.Dividend of $24 was declared and paid during 2017.

10. On the last day of the year, POL gave a loan of $50 to its twin sister company, CLA.

11.Unearned revenue account remained intact during 2017.

a.What was the balance of the Prepaid rent account on December 31, 2016?

b.Record journal entries for all transactions occurred during 2017.

c.Prepare an Income Statement for the year ended December 31, 2017.

d. Prepare a Balance Sheet for December 31, 2017.

Custom Auto Parts started this year with the following balances:

      Cash: $60,000

      Merchandise Inventory: $8,000

      Land: $12,000

      Accounts Payable: $0

      Common Stock: $50,000

      Retained Earnings: $30,000

During the year they had the following transactions:

Purchase $60,000 of merchandise inventory on account, terms 2/10,n/30.

The goods delivered in Event 1 were delivered FOB shipping point. Freight costs of $1,500 were paid in cash by the responsible party

Returned $3,000 of goods purchased in Event 1

Paid the balance due on the goods purchased in Event 1 and recorded the cash discount.

Recognized $59,000 of cash revenue from the sale of merchandise and recognized $45,000 of cost of goods sold from such sale.

The goods sold in Event 5 were delivered to the customers FOB destination. Freight costs of $1,400 were paid in cash by the responsible party.

Paid $9,000 in cash for selling and administrative expenses.

Sold the land for $14,500 in cash.

Using Excel, assuming a perpetual inventory system, record each transaction in the horizontal statements model.

After completing the recording of the transactions, prepare a multistep income statement. Include common size percentages on the income statement.

I need help with this part below!!

Hervis Car Rental in Austin, Texas, has 50 high-performance Shelby-H Mustangs in its rental fleet. These cars will be in greater demand than usual during the last weekend in July when the Central Texas Mustang Club holds its annual rally in Austin. At times like this, Hervis uses a revenue management system to determine the optimal number of reservations to have available for the Shelby-H cars.

Hervis has agreed to have at least 60% of its Shelby-H Mustangs available for rally attendees at a special rate. Although many of the rally attendees will request a Saturday and Sunday two-day package, some attendees may select a Saturday-only or a Sunday-only reservation. Customers not attending the rally may also request a Saturday and Sunday two-day package, or make a Saturday-only or Sunday-only reservation. Thus, six types of reservations are possible. The cost for each type of reservation is shown here.

The anticipated demand for each type of reservation is as follows:

Hervis Car Rental would like to determine how many Shelby-H Mustangs to make available for each type of reservation in order to maximize total revenue.

1. Determine an optimal solution.

ORIGINAL Question (This has been asked and answered on previous forums)

John's Boat Yard, Inc., repairs, stores, and cleans boats for customers. It is completing the accounting process for the year just ended on November 30. The transactions for the past year have been journalized and posted. The following data with respect to adjusting entries at year-end are available:

John's winterized (cleaned and covered) three boats for customers at the end of November, but did not record the service for $4,200.

On October 1, John's paid $1,680 to the local newspaper for an advertisement to run every Thursday for 12 weeks. All ads have been run except for three Thursdays in December to complete the 12-week contract.

John’s borrowed $258,000 at a 9 percent annual interest rate on April 1 of the current year to expand its boat storage facility. The loan requires John's to pay the interest quarterly until the note is repaid in three years. John's paid quarterly interest on July 1 and October 1.

The Johnson family paid John’s $4,080 on November 1 to store its sailboat for the winter until May 1 of the next fiscal year. John's credited the full amount to Unearned Storage Revenue on November 1.

John’s used boat-lifting equipment that cost $260,000; $26,000 was the estimated depreciation for current year.

Boat repair supplies on hand at the beginning of the current year totaled $18,100. Repair supplies purchased and debited to Supplies during the year amounted to $47,600. The year-end count showed $13,100 of the supplies on hand.

Wages of $5,300 earned by employees during November were unpaid and unrecorded at November 30. The next payroll date will be December 5 of the next fiscal year.

Current Questions: (Questions I am seeking help with - I am seeking explanations)

I am confused by this problem. The fiscal year for this company goes from November 30th to November 30th, from year to year? Is that correct?

We are then making adjusting entries to cover the remainder of the calendar year, which in this instance covers the month of December?

How is the answer to "C" regarding the payment of interest derived? I see that the company pays 9% interest on a $258,000 dollar loan, which equates to $21,600 dollars interest per year. It seems that the answer seeks the student to solely log two months interest or $3,600 dollars. But if the matter was paid on July 1st and Oct 1st, by the time of Nov. 30th would these transaction not have already been recorded??? What is going on here?

Also, specifcally with respect to part "F" concerning the cost of supplies - Would we not determine the unadjusted balance by combining the beginning balance ($18,100) + purchases ($47,600) to arrive at an unadjusted balance from which we would need to adjust down to the current level of supplies on hand ($13,100)? I do not understand how/why we would simply adjust from the beginning balance to the ending balance and assume that entries for the $47,600 dollars worth of supply purchases were not journaled and recorded. Are you able to explain this, as similar posts simply subtract beginning balance from ending balance and add entries to the ledger for the difference. (This differs from the text's example and I cannot tell what I should be reading within the context of the problem to know when to do what method.)