Post your response and recommendations in a well thought out manner. Provide reasons to explain your position on the issue.

Your response should demonstrate thoughtful consideration of the ideas and concepts that are presented in the discussion and provide new thoughts and insights directly related to the topic. Your response should reflect scholarly writing and follow current APA standards.

Discussion Questions and Critical Thinking/Ethical Case

1.

What are the functions of accounting?

2.

Define, compare, and contrast sole proprietorships, partnerships, and corporations.

3.

How are businesses classified?

4.

How has technology affected the role of the bookkeeper?

5.

List the three elements of the basic accounting equation.

6.

Define capital.

7.

The total of the left-hand side of the accounting equation must equal the total of the right-hand side. True or false? Please explain.

8.

A balance sheet tells a company where it is going and how well it performs. True or false? Please explain.

9.

Revenue is an asset. True or false? Please explain.

10.

Owner’s equity is subdivided into what categories?

11.

A withdrawal is a business expense. True or false? Please explain.

12.

As expenses increase they cause owner’s equity to increase. Defend or reject.

13.

What does an income statement show?

14.

The statement of owner’s equity only calculates ending withdrawals. True or false? Please explain.

15.

Paul Kloss, an accountant for Lowe & Co., traveled to New York on company business. His total expenses came to $350. Paul felt that because the trip extended over the weekend he would “pad” his expense account with an additional $100 of expenses. After all, weekends represent his own time, not the company’s. What would you do? Write your specific recommendations to Paul.

Randall Company is a merchandising company that sells a single product. The company's inventories, production, and sales in units for the next three months have been forecasted as follows:

a. Units are sold for $12 each. One fourth of all sales are paid for in the month of sale and the balance is paid for in the following month. Accounts receivable at September 30 totaled $450,000.
Required: Prepare a sales budget and cash collection schedule

b. Merchandise is purchased for $7 per unit. Half of the purchases are paid for in the month of the purchase and the remainder is paid for in the month following purchase. Selling and administrative expenses are expected to total $120,000 each month. One half of these expenses will be paid in the month in which they are incurred, and the balance will be paid in the following month. There is no depreciation. Accounts payable at September 30 totaled $290,000.
Required: Prepare a schedule showing expected cash disbursements for merchandise purchases and selling and administrative expenses for each of the months October, November, and December.

c. Cash at September 30 totaled $80,000. A payment of $300,000 for purchase of equipment is scheduled for November, and a dividend of $200,000 is to be paid in December.
Required: Prepare a cash budget for each of the months October, November, and December. There is no minimum required ending cash balance.

The budget director for Martin Washing Services prepared the following list of expected selling and administrative expenses. All expenses requiring cash payments are paid for in the month incurred except salary expense and insurance. Salary is paid in the month following the month in which it is incurred. The insurance premium for six months is paid on October 1. October is the first month of operations; accordingly, there are no beginning account balances.

1. Complete the schedule of cash payments for S&A expenses by filling in the missing amounts.

2. Determine the amount of salaries payable the company will report on its pro forma balance sheet at the end of the fourth quarter.

3. Determine the amount of prepaid insurance the company will report on its pro forma balance sheet at the end of the fourth quarter.

Rocky Ltd is a small business based in Napier, it sells one product which it manufacturers itself. It is currently in the process of establishing the fourth-quarter budget for 2015. Mark Leewood, the production manager has only been working for the company for a month, and is a little bit worried about aligning the production processes. He has asked for your help and provided you with the following information:

• The product sells for $325 per unit.
• Estimated sales volume in units for the next six months is:

• Rocky Ltd’s policy is to maintain ending finished goods inventory each month at a level equal to 40% of the next month’s budgeted sales.
• To make one unit of finished product, 5 kilos of direct materials are required.
• Rocky Ltd’s policy is to have enough materials on hand at the end of the month to equal 30% of next month’s usage.
• The cost per kilogram of material is $22.50.
• The product’s contribution margin is $250.

1. Prepare a production budget for Mark Leewood, in units for the last quarter of 2015.
2. Prepare a materials purchases budget for Mark, in kilograms for October and November 2015.
3. What is the cost of purchases in October?
4. Why is it important in a manufacturing environment to prepare a production and purchases budget? Answer with reference to the planning and control cycle.

Personal Budget

At the beginning of the school year, Priscilla Wescott decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget:

a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except cash decrease which should be indicated with a minus sign.

Stanley Burrell founder of a company named Hammer Time Inc. Hammer Time Inc produces specialty functional novelty hammers in the image of Stanley Burrell himself, aka MC Hammer. The three best-selling/most popular products sold by Hammer Time Inc. are Hammer Head Hammers, Hammer Pants Hammers, and Please Hammer Don't Hurt ‘Em Mini Hammers.

Hammer Time Inc. uses the actual total factory overhead costs from the prior year (corresponding month) to estimate the total factory overhead costs. They do this by taking last year’s actual costs (same month) and increasing them by 8%.

Actual Total Factory Overhead costs October '18 = $3,000,000

For the month of October '19 for the production in the 2 Legit Warehouse

Estimated Machine Hours = 128,000

Hammer Head Hammers = 50,300 machine hours

Hammer Pants Hammers = 41,200 machine hours

Mini Hammers = 27,300 machine hours

Actual Total Factory Overhead costs October '19 = $3,130,560

A. What is the predetermined overhead rate?

B. If the predetermined factory overhead rate was applied to the three products in March what would be the under/over applied factory overhead once the actual factory overhead cost was known?

C. Using the data from how much factory overhead would be applied to Hammer Pants Hammers?