Part I. The trial balance for Game Time on December 31 is as follows:

Data for month-end adjustments are as follows:

Expired or used-up insurance, $1,200

Depreciation expense on equipment, $2,200

Depreciation expense on repair equipment, $400

Wages accrued or earned since the last payday, $1,750 (owed and to be paid on the next payday)

Question 1 (40 points). Complete a work sheet attached for the month. (use the separate answer sheet provided)

Question 2 (10 points). Journalize the adjusting entries below.

Part II.

Question 1. Describe the Accrued Revenue, Accrued Expense, Deferred Revenue, and Deferred Expense in detail. Give me at least one example and the journal entries for them. (20 points)

National Aluminum Products Company is a state owned enterprise. Its main product is PVC pipes manufactured through extrusion process. The company is catering for the needs of the country for PVC articles, particularly in sanitary work. The company has just enhanced its capacity to 450 units per day. The average selling price of PVC pipes is computed to be OMR 25 per unit. Given below is the company’s last year revenue and cost information:

a) Compute the break-even point for last year.

b) Assume that if the company spends 23000 OMR on additional marketing, the company can sell the unit at 5% higher price. Keeping other cost pattern the same, what will be the new break-even point?

c) Assume that there are 260 working days in a year, what will be the after tax profit, if the company operates at its full capacity?

d) How many units the company must sell, if the management sets the next year target an after tax profit of OMR 480,000?

e) What will be the margin of safety, if the company is able to sell its full capacity?

The many identical residents of Whoville love drinking Zlurp. Each resident has the following willingness to pay for the tasty refreshment:

The cost of producing a bottle of Zlurp is $3.50, and the competitive suppliers sell it at this price. (The supply curve is horizontal.)

Each Whovillian will consume (HOW MANY) bottles and receive a consumer surplus of $?

Producing Zlurp creates pollution. Each bottle has an external cost of $1.

Taking this additional cost into account, total surplus per person in the allocation you previously determined decreases to.

Cindy Lou Who, one of the residents of Whoville, decides on her own to reduce her consumption of Zlurp by 1 bottle.

Cindy's consumer surplus (ignoring the cost of pollution she experiences) is now $?. Her decision INCREASES OR DECREASES total surplus in Whoville by $?

Mayor Grinch imposes a $1 tax on each bottle of Zlurp.

Consumption per person is now _   bottles. This yields a per-person consumer surplus of $? not including the cost of pollution, a per-person external cost of $?, and government revenue of $? per person. Total surplus per person is now $? as a result of this policy. (Hint: Total surplus is equal to consumer surplus minus the external cost of pollution plus government revenue.)

Based on your calculations, you WOULD OR WOULD NOT support the mayor's policy because it INCREASES OR DEACREASES welfare compared to before the tax.

Golfy Golf Inc. was opened on April 1 by Wee Snaw. These selected events and transactions occurred during April.

Question: Journalize the April transactions. Golfy Golf’s records golf fees as service revenue.

If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.

Record journal entries in the order presented in the problem

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

The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reports—the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 60 students enrolled in those two courses. Data concerning the company’s cost formulas appear below:

For example, administrative expenses should be $4,000 per month plus $45 per course plus $4 per student. The company’s sales should average $890 per student.

The company planned to run four courses with a total of 60 students; however, it actually ran four courses with a total of only 50 students. The actual operating results for September appear below:

Required:

Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

1.

Financial information is presented below:

The amount of net sales on the income statement would be

$160000.

$166000.

$158000.

$164000.

2.

Financial information is presented below:

Gross Profit would be

$36000.

$32000.

$34000.

$26000.

3.

Novak has the following inventory data:

A physical count of merchandise inventory on November 30 reveals that there are 122 units on hand. Ending inventory under FIFO is

$1932.

$937.

$1886.

$983.

4.

Pharoah Company had the following inventory transactions occur during 2022:

The company sold 379 units at $78 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, and operating expenses of $2232, what is the company’s after-tax income using LIFO?

$4856.00

$3901.80

$3399.20

$5574.00

John has applied and been approved a licence to operate a casino in Melbourne, which later on he
named it The Casino East. John has received 10-year licence from Victorian Government to operate
the casino. He also received approval for Casino’s building for a long period of time (90 years).
John was instructed by the relevant Government agency to pay $180 million for the approved
casino’s licence and $80 million as prepaid rent covering the first 10 years of casino’s rental. John
has negotiated to pay $400,000 rental per year for the remaining 80 years of the lease.
With reference to relevant legislation and case law discuss whether casinos prepaid rent is
considered a revenue expense or a capital expense.

All the marking criteria need to answer.

Delta Oil Company uses the successful-efforts method to account for oil exploration costs. Delta started business in 2014 and prepared the following income statements: DELTA OIL COMPANY Income Statements For the Years Ended December 31, 2014 - 2015 1 2014 2015 2 Revenue $1,000,000.00 $3,000,000.00 3 Other expenses 400,000.00 1,300,000.00 4 Exploration expenses 120,000.00 238,000.00 5 Income before income taxes $480,000.00 $1,462,000.00 6 Income tax expense (30%) 144,000.00 438,600.00 7 Net income $336,000.00 $1,023,400.00 8 Earnings per share $3.36 $10.23 The company chose to change to the full-cost method at the beginning of 2016. Under the full-cost method, Delta capitalizes all exploration costs of the Oil and Gas Properties asset account on its balance sheet. It determines the exploration and amortization expense amounts under the full-cost method to be as follows: 2014 2015 2016 Exploration expense $0 $0 $0 Amortization expense 8,000 18,200 42,000 In addition, Delta reported revenue of $9,000,000 and other expenses of $4,200,000 in 2016. With the 2016 financial statements, the company issues comparative statements for the previous 2 years. Required: 1. Prepare the journal entry to reflect the change. 2. Prepare the comparative income statements and the comparative statements of retained earnings for 2016, 2015, and 2014. Notes to the financial statements are not necessary. 3. Next Level Discuss the advantages and disadvantages of accounting for a change in this manner.

Instructions

Delta Oil Company uses the successful-efforts method to account for oil exploration costs. Delta started business in 2014 and prepared the following income statements:

Question not attempted.

The company chose to change to the full-cost method at the beginning of 2016. Under the full-cost method, Delta capitalizes all exploration costs of the Oil and Gas Properties asset account on its balance sheet. It determines the exploration and amortization expense amounts under the full-cost method to be as follows:

In addition, Delta reported revenue of $9,000,000 and other expenses of $4,200,000 in 2016. With the 2016 financial statements, the company issues comparative statements for the previous 2 years.

Required: