Use the following Adjusted Trial Balance and Statement of Retained Earnings to prepare the CLASSIFIED BALANCE SHEET for Hang in There Company for April 30, 2020
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Hang in There Company |
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Adjusted Trial Balance |
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April 30, 2020 |
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Account Title |
Balance |
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Debit |
Credit |
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Cash |
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$ 47,000 |
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Accounts Receivable |
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12,500 |
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Supplies |
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1,000 |
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Prepaid Rent |
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2,600 |
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Building |
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400,000 |
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Accumulated Depreciation—Building |
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$ 175,000 |
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Accounts Payable |
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3,200 |
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Unearned Revenue |
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1,400 |
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Bonds Payable (Long Term) |
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1,800 |
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Common Stock - $1 Par Value |
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180,000 |
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Paid in Capital in Excess of Par -Common |
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73,300 |
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Retained earnings |
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18,200 |
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Service Revenue |
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23,000 |
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Salaries Expense |
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3,400 |
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Rent Expense |
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1,400 |
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Depreciation Expense—Building |
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2,800 |
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Supplies Expense |
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3,200 |
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Tax Expense |
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2,000 |
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Total |
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$ 475,900 |
$ 475,900 |
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Hang in There Company
Statement of Retained Earnings
April 30, 2020
Retained Earnings, May 1, 2019 $18,200
Net Income for the Year 10,200
Dividends0
Retained Earnings, April 30, 2020 $28,400
In: Accounting
Neubert Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During December, the company budgeted for 5,300 units, but its actual level of activity was 5,340 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for December:
Data used in budgeting:
| Fixed Element per Month | Variable element per unit | ||||
| Revenue | - | $ | 30.00 | ||
| Direct labor | $ | 0 | $ | 3.50 | |
| Direct materials | 0 | 10.40 | |||
| Manufacturing overhead | 33,300 | 1.50 | |||
| Selling and administrative expenses | 25,000 | 0.50 | |||
| Total expenses | $ | 58,300 | $ | 15.90 | |
Actual results for December:
| Revenue | $ | 156,340 |
| Direct labor | $ | 17,980 |
| Direct materials | $ | 56,566 |
| Manufacturing overhead | $ | 41,040 |
| Selling and administrative expenses | $ | 28,870 |
The net operating income in the flexible budget for December would be closest to:
Garrison 16e Rechecks 2018-06-07
Multiple Choice
$16,430
$16,994
$11,795
$11,974
In: Accounting
AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February:
| Fixed Component per Month |
Variable Component per Job |
Actual Total for February |
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| Revenue | $ | 279 | $ | 33,520 | |||||
| Technician wages | $ | 8,500 | $ | 8,350 | |||||
| Mobile lab operating expenses | $ | 4,800 | $ | 31 | $ | 8,670 | |||
| Office expenses | $ | 2,500 | $ | 2 | $ | 2,610 | |||
| Advertising expenses | $ | 1,620 | $ | 1,690 | |||||
| Insurance | $ | 2,870 | $ | 2,870 | |||||
| Miscellaneous expenses | $ | 960 | $ | 2 | $ | 525 | |||
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,800 plus $31 per job, and the actual mobile lab operating expenses for February were $8,670. The company expected to work 130 jobs in February, but actually worked 138 jobs.
Required:
Prepare a flexible budget performance report showing AirQual Test Corporation’s revenue and spending variances and activity variances for February
In: Accounting
Differential Analysis Report for a Discontinued Product
The condensed product-line income statement for Porcelain Tableware Company is as follows:
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PORCELAIN TABLEWARE COMPANY Product-Line Income Statement |
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| Bowls | Plates | Cups | ||||||
| Sales | $658,000 | $903,000 | $272,000 | |||||
| Cost of goods sold | (271,000) | (335,000) | (154,000) | |||||
| Gross profit | $387,000 | $568,000 | $118,000 | |||||
| Selling and administrative expenses | (289,000) | (344,000) | (144,000) | |||||
| Operating income (loss) | $98,000 | $224,000 | $(26,000) | |||||
Fixed costs are 42% of the cost of goods sold and 16% of the selling and administrative expenses. Porcelain Tableware assumes that fixed costs would not be significantly affected if the Cups line were discontinued.
a. Prepare a differential analysis report for all three products.
| PORCELAIN TABLEWARE COMPANY | |||
| Product Income | |||
| Differential Analysis Report | |||
| Bowls | Plates | Cups | |
| Differential revenue from monthly sales: | |||
| Revenue from sales | $ | $ | $ |
| Differential costs of monthly sales: | |||
| Variable cost of goods sold | $ | $ | $ |
| Variable selling and administrative expenses | |||
| $ | $ | $ | |
| Monthly differential income from sales | $ | $ | $ |
In: Accounting
Halogen Laminated Products Company began business on January 1, 2021. During January, the following transactions occurred:
| Jan. | 1 | Issued common stock in exchange for $107,000 cash. | ||
| 2 | Purchased inventory on account for $42,000 (the perpetual inventory system is used). | |||
| 4 | Paid an insurance company $3,240 for a one-year insurance policy. Prepaid insurance was debited for the entire amount. | |||
| 10 | Sold merchandise on account for $12,700. The cost of the merchandise was $7,700. | |||
| 15 | Borrowed $37,000 from a local bank and signed a note. Principal and interest at 10% is to be repaid in six months. | |||
| 20 | Paid employees $6,700 salaries for the first half of the month. | |||
| 22 | Sold merchandise for $10,700 cash. The cost of the merchandise was $6,700. | |||
| 24 | Paid $15,700 to suppliers for the merchandise purchased on January 2. | |||
| 26 | Collected $6,350 on account from customers. | |||
| 28 | Paid $1,100 to the local utility company for January gas and electricity. | |||
| 30 | Paid $4,700 rent for the building. $2,350 was for January rent, and $2,350 for February rent. Prepaid rent and rent expense were debited for their appropriate amounts. |
Post the transactions into the appropriate T-accounts. (Enter the date of the transaction in the column next to the amount.)
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Cash Accounts Receivable Beg. bal. Beg. bal. End. bal. End. bal. Inventory Prepaid Insurance Beg. bal. Beg. bal. End. bal. End. bal. Prepaid Rent Accounts Payable Beg. bal. Beg. bal. End. bal. End. bal. Notes Payable Common Stock Beg. bal. Beg. bal. End. bal. End. bal. Sales Revenue Cost of Goods Sold Beg. bal. Beg. bal. End. bal. End. bal. Salaries Expense Rent Expense Beg. bal. Beg. bal. End. bal. End. bal. Utilities Expense Beg. bal. End. bal. |
In: Accounting
Assume that you are the audit partner on an engagement for a
client that has had a string of operating losses. You know the CFO,
who is a former audit manager of your firm. The company still has a
positive net worth, but you are worried that the company might have
to close down within the next year or so. When you tell the CFO
that the company should make full disclosure in the notes
concerning substantial doubt about the company’s ability to
continue as a going concern, your colleague says, “Hogwash! There’s
no substantial doubt. The probability of our having to close down
is remote. We’ll make no such disclosure. To do so would only make
our customers and creditors nervous, possibly making such a
disclosure a self-fulfilling prophecy. Our competitors are as bad
off as we are, and their auditors aren’t making them send out a
distress signal.” You agree that the determination of “substantial
doubt” is a judgment call.
Apply the five-step Conceptual Framework for Members in Public
Practice to this dilemma.
1) Identify problem
2) Evaluate it significance
3) Consider solutions
4) Select best solution
5) Document decisions,
implement and evaluate
In: Accounting
The following transactions occurred during March 2021 for the Wainwright Corporation. The company owns and operates a wholesale warehouse. Issued 50,000 shares of common stock in exchange for $500,000 in cash. Purchased equipment at a cost of $80,000. $20,000 cash was paid and a notes payable to the seller was signed for the balance owed. Purchased inventory on account at a cost of $152,000. The company uses the perpetual inventory system. Credit sales for the month totaled $220,000. The cost of the goods sold was $132,000. Paid $6,750 in rent on the warehouse building for the month of March. Paid $7,300 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2021. Paid $132,000 on account for the merchandise purchased in 3. Collected $99,000 from customers on account. Recorded depreciation expense of $2,000 for the month on the equipment. Required: Analyze each transaction and show the effect of each on the accounting equation for a corporation. (Amounts to be deducted should be indicated by a minus sign. Enter the net change on the accounting equation.)
Required:
Analyze each transaction and show the effect of each on the
accounting equation for a corporation. (Amounts to be
deducted should be indicated by a minus sign. Enter the net change
on the accounting equation.)
In: Accounting
For each of the following independent situations, assume that any amounts would be material.
(I) Indicate the TYPE of appropriate audit report; A. unqualified, B. qualified or adverse, C. qualified or disclaimer, D. Disclaimer, E. Qualified only, or F. Other. INDICATE the situation involved, i.e "Accounting situation", and DISCUSS the situation.
(II) State whether an explanatory paragraph [i.e. PCAOB audit] would be included, and if so, what would be included in the explanatory paragraph.
(III) For an UNQUALIFIED auditor's report, if the wording would be changed, indicate how it would be changed [Relates to Shared Report].
(iv) The auditor agrees to any accounting change, if the change is proper GAAP.
1. The company uses an appraiser's estimate of current Replacement Cost to report the value of previously acquired land owned by the company. It is felt this is more recent information
2. The controller requested that the auditor not send accounts receivable confirmations to its largest customers. The auditors used alternative procedures to ascertain the existence of the receivables
3. The company uses Lower of Cost or Market rather than Historic Cost to value inventory. It is felt that this is more recent information.
In: Operations Management
to restore growth in revenue and profitability the firm acquired competitor Jos.A.Bank in late 2014 for $1.8 billion after a heated bidding war.The final bid of $65 in cash for each Jos.A.Bank 's share represented a 56% premium to the closing price in early october 2013.The combined company had annual revenue of $3.5 billion and projected annual savings of $100-$150 million consisting of lower overhead,more efficient marketing and improved customer service.
How does the size of the premium paid for Jos.A. Bank affect the pace and extent of postmerger integration?
In: Finance
Shamrock Company is involved in five separate industries. The following information is available for each of the five industries:
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Operating Segment |
Total Revenue |
Operating Profit (Loss) |
Identifiable Assets |
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Ohio |
$20,000 |
($1,700) |
$30,000 |
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Texas |
$13,000 |
($1,500) |
$170,000 |
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Iowa |
$29,000 |
$1,100 |
$35,000 |
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Delaware |
$12,000 |
$1,600 |
$10,000 |
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Nevada |
$48,000 |
$15,000 |
$80,000 |
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$122,000 |
$14,500 |
$325,000 |
Required: Determine which of the operating segments are reportable based on the:
Revenue test.
Operating profit (loss) test.
Identifiable assets test.
What are the benefits of disclosing financial results based on segments?
In: Accounting