Answer:
a. compute the equivalent units of production for materials and conversion costs
materials = 44,500
conversion costs = 40,000
b. compute the unit costs for materials and conversion costs for the month
materials = $4.40
conversion = $10.65
c. determine the costs to be assign to the units transferred out in the process
Cost of units transferred out in the process = $594,475
Explanation:
a. compute the equivalent units of production for materials and conversion costs
materials
Units Completed and Transferred to Finished Goods (100%×39,500) =39,500
Units in Closing Work In Process (100%×5,000) = 5,000
Total = 44,500
conversion costs
Units Completed and Transferred to Finished Goods (100%×39,500) =39,500
Units in Closing Work In Process (10%×5,000) =
500
Total = 40,000
Calculation of Units Completed and Transferred to Finished Goods
1,600+42,900-5,000 = 39,000
b. compute the unit costs for materials and conversion costs for the month
materials
Opening Work In Process Costs = $20,000
Add Costs Incurred during the Period = $175,800
Total = $195,800
Unit costs for materials = Total Costs / Equivalent units of production for materials
= $195,800 / 44,500
= $4.40
conversion
Opening Work In Process Costs = $43,180
Add Costs Incurred during the Period($125,680 + $257,140) = $382,820
Total = $426,000
Unit costs for conversion = Total Costs / Equivalent units of production for conversion
= $426,000 / 40,000
= $10.65
c. determine the costs to be assign to the units transferred out in the process
Total Unit Cost Calculation
Materials = $4.40
Conversion = $10.65
Total = $15.05
Cost of units transferred out in the process = 39,500 × $15.05
= $594,475
Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared monthly for each department. The planning budget and flexible budget for the Production Department are based on the following formulas, where q is the number of labor-hours worked in a month.
Cost Formulas
Direct labor $16.20q
Indirect labor $4,300 $1.70q
Utilities $5,600 $0.70q
Supplies $1,400 $0.20q
Equipment depreciation $18,400 $2.90q
Factory rent $8,200
Property taxes $2,700
Factory administration $13,200 $0.80q
The Production Department planned to work 4,200 labor-hours in March; however, it actually worked 4,000 labor-hours during the month. Its actual costs incurred in March are listed below.
Direct labor $66,360
Indirect labor $10,620
Utilities 8,930
Supplies 2,450
Equipment depreciation $30,000
Factory rent 8,600
Property taxes $2,700
Factory administration $15,796
Required:
a. Prepare the Production Department's planning budget for the month
b. Prepare the Production Department's flexible budget for the month.
Answer and Explanation:
a. The Preparation of the Production Department's planning budget for the month is shown below:-
Packaging Solutions Corporation
Production Department's planning budget for the month
Particulars Amount
Budgeted labor hours 4,200
Direct labor $16.20 × 4,200 $68,040
Indirect labor $4,300 + $1.70 × 4,200 $11,440
Utilities $5,600 + $0.70 × 4,200 $8,540
Supplies $1,400 + $0.20 × 4,200 $2,240
Equipment
depreciation $18,400 + $2.90 × 4,200 $30,580
Factory rent $8,200
Property taxes $2,700
Factory
administration $13,200 + $0.80 × 4,200 $16,560
Total cost $148,300
To reach at production Department's planning budget we simply added all the expenses.
b. The Preparation of the Production Department's flexible budget for the month is shown below:-
Packaging Solutions Corporation
Production Department's flexible budget for the month
Particulars Amount
Actual labor hours 4,000
Direct labor $16.20 × 4,000 $64,800
Indirect labor $4,300 + $1.70 × 4,000 $11,100
Utilities $5,600 + $0.70 × 4,000 $8,400
Supplies $1,400 + $0.20 × 4,000 $2,200
Equipment
depreciation $18,400 + $2.90 × 4,000 $30,000
Factory rent $8,200
Property taxes $2,700
Factory
administration $13,200 + $0.80 × 4,000 $16,400
Total cost $143,800
To reach at production Department's flexible budget we simply added all the expenses.
Bamboo Consulting is a consulting firm owned and operated by Lisa Gooch. The following end-of-period spreadsheet was prepared for the year ended July 31, 2016:
Bamboo Consulting
End-of-Period Spreadsheet
For the Year Ended July 31, 2016
Unadjusted Trial Balance Adjustments Adjusted Trial Balance
Account Title Dr. Cr. Dr. Cr. Dr. Cr.
Cash 58,000 58,000
Accounts Receivable 106,200 106,200
Supplies 11,900 (a) 7,500 4,400
Office Equipment 515,000 515,000
Accumulated Depreciation 28,000 (b) 5,600 33,600
Accounts Payable 20,500 20,500
Salaries Payable (c) 2,500 2,500
Lisa Gooch, Capital 516,700 516,700
Lisa Gooch, Drawing 25,000 25,000
Fees Earned 348,500 348,500
Salary Expense 186,500 (c) 2,500 189,000
Supplies Expense (a) 7,500 7,500
Depreciation Expense (b) 5,600 5,600
Miscellaneous Expense 11,100 11,100
913,700 913,700 15,600 15,600 921,800 921,800
Based on the preceding spreadsheet, prepare an income statement, statement of owner’s equity, and balance sheet for Bamboo Consulting. Be sure to read the instructions for each financial statement carefully.
CHART OF ACCOUNTS
Bamboo Consulting
General Ledger
ASSETS
11 Cash
12 Accounts Receivable
13 Supplies
14 Office Equipment
15 Accumulated Depreciation
LIABILITIES
21 Accounts Payable
22 Salaries Payable
EQUITY
31 Lisa Gooch, Capital
32 Lisa Gooch, Drawing
33 Income Summary
REVENUE
41 Fees Earned
EXPENSES
51 Salary Expense
52 Supplies Expense
53 Depreciation Expense
54 Miscellaneous Expense
Labels
Current assets
Current liabilities
Expenses
For the Year Ended July 31, 2016
July 31, 2016
Property, plant, and equipment
Revenues
Amount Descriptions
Add withdrawals
Decrease in owner’s equity
Increase in owner’s equity
Less withdrawals
Lisa Gooch, capital
Lisa Gooch, capital, August 1, 2015
Lisa Gooch, capital, July 31, 2016
Net income
Net loss
Total assets
Total current assets
Total expenses
Total liabilities
Total liabilities and owner’s equity
Total property, plant, and equipment
Total revenues
1. Prepare an income statement for the year ended July 31, 2016 for Bamboo Consulting. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) on the income statement.
2. Prepare a statement of owner’s equity for the year ended July 31, 2016 for Bamboo Consulting. No additional investments were made during the year. If a net loss has been incurred or there has been a decrease in owner’s equity, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items.
3. Prepare a balance sheet as of July 31, 2016 for Bamboo Consulting. Fixed assets must be entered in order according to account number. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) or the word "Less" on the balance sheet; they will automatically insert where necessary.
Answer:
Net income 135,300
Total Retained Earnings 652,000
Total Owner's Equity 627,000
Total Assets 650,000
Total liabilities and owner’s equity 650,000
Explanation:
First we find the net income by subtracting expense from revenues.
Bamboo Consulting
Income statement
For the Year Ended July 31, 2016
Revenues
Fees Earned 348,500
Expenses: 213,200
Salary Expense 189000
Supplies Expense 7,500
Depreciation Expense 5,600
Miscellaneous Expense 11,100
Net income 135,300
Then we find the retained earnings by adding net income to it.
Bamboo Consulting
Statement of Retained Earnings
For the Year Ended July 31, 2016
Lisa Gooch, Capital 516,700
Add Net income 135,300
Total Retained Earnings 652,000
Bamboo Consulting
Balance Sheet
For the Year Ended July 31, 2016
Cash 58,000
Accounts Receivable 106,200
Supplies 4,400
Office Equipment 515,000
Less Accumulated Depreciation 33,600
Office Equipment 481,400
Total Assets 650,000
Total liabilities
Salaries Payable 2,500
Accounts Payable 20,500
Total Owner's Equity 627,000
Retained Earnings 652,000
Less Drawings 25000
Total liabilities and owner’s equity 650,000
The total of debits Assets is equal to the total of Liabilities and Owner's Equity , credits.
Nester, a salesperson for Olive Grove Corporation, learns that Olive Grove will increase the dividend it pays to shareholders. Nester buys 10,000 shares of Olive Grove stock. When the dividend is announced to the public and the price of the stock increases, Nester sells his shares for a profit. Nester would not be liable for insider trading if the information about the dividend was:__________.A) material when he sold the stock.B) available to the public after he bought the stock.C) available to the public before he bought the stock.D) forward-looking when he bought the stock.
Answer:
C) available to the public before he bought the stock
Explanation:
Insider trading is when an agent or someone with privileged information on the future performance of stocks buys stocks based on this information with the aim of making gain.
This is an illegal activity and pepertrators can be charged for insider trading.
In this scenario Nester buys shares because he knew dividends were going to increase, and sells them to make a profit.
He will not be liable for insider trading if the information on dividend increase was available to the public before he bought the stock. Then it will not be confidential information
True or false: All desires of human beings are known as ‘Demand’.
Answer:
False
Explanation:
Suppose that business travelers and vacationers have the following demand for airline tickets from New York to Boston:
Price Quantity Demanded by Business Travelers Quantity Demanded by Vacationers (Dollars) (Tickets) (Tickets)
150 2,100 Tickets 1,000 Tickets
200 2,000 800
250 1,900 600
300 1,800 400
As the price of tickets rises from $150 to $200, the price elasticity of demand for business travelers is _________, and the price elasticity of demand for vacationers is__________ , using the midpoint method. Therefore, the demand for airline tickets in this price range is elastic for vacationers because business travelers are sensitive to changes in price.
Answer
Price elasticiy of demand for business travelers: -0.16
Price elasticity of demand for vacationers: -0.29
Explanation:
To find the price elasticy of demand (PED) using the midpoint method, we use the following formula:
[tex]PED = \frac{(Q2-Q1)/[(Q2+Q1)/2]}{(P2-P1)/[(P2+P1/2]}[/tex]
Where Q2 and P2 are the new quantity demanded and new price respectively, and Q1 and P1 are the old quantity demanded and price.
Plugging the amounts into the formula we obtain the results of the answer.
Because both results are in absolute value less than one (0.16 and 0.29), we can say that the PED of tickets, for both vacationers and Business traveleres, is relatively inelastic. (Demand falls less in proportion to the change in price).
Indicate how each of the following would shift the (1) marginal-cost curve, (2) average-variable-cost curve, (3) average-fixed-cost curve, and (4) average-total-cost curve of a manufacturing firm. In each case specify the direction of the shift.
Required:
a. A reduction in business property taxes.
b. An increase in the nominal wages of production workers.
c. A decrease in the price of electricity.
d. An increase in insurance rates on plant and equipment.
e. An increase in transportation costs.
Answer:
a. A reduction in business property taxes. Fixed cost.
Marginal cost curve = No change
Average variable cost curve = No change
Average-fixed-cost curve = Shift down
Average-total-cost curve = Shift down
b. An increase in the nominal wages of production workers is a Variable cost.
Marginal cost curve = Shift up
Average variable cost curve = Shift up
Average-fixed-cost curve = No change
Average-total-cost curve = Shift up
c. A decrease in the price of electricity (Variable cost)
Marginal cost curve = Shift down
Average variable cost curve = Shift down
Average-fixed-cost curve = No change
Average-total-cost curve = Shift down
d. An increase in insurance rates on plant and equipment. (Fixed cost)
Marginal cost curve = No change
Average variable cost curve = No change
Average-fixed-cost curve = Shift up
Average-total-cost curve = Shift up
e. An increase in transportation costs. (Variable cost)
Marginal cost curve = Shift up
Average variable cost curve = Shift up
Average-fixed-cost curve = No change
Average-total-cost curve = Shift up
Explanation:
Way Cool produces two different models of air conditioners. The company produces the mechanical systems in their components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow.
Process Activity Overhead Cost Driver Quantity
Components Changeover $458,000 Number of batches 810
Machining 307,000 Machine hours 7,650
Setups 232,000 Number of setups 160
997,000
Finishing Welding 188,000 Welding hours 4,100
Inspecting 231,000 Number of inspections 835
Rework 62,000 Rework orders 150
$ 481,000
Support Purchasing $143,000 Purchase orders 525
Providing space 32,000 Number of units 5,020
Providing utilities 61,000 Number of units 5,020
$ 236,000
Additional production information concerning its two product lines follows.
Model 145 Model 212
Units produced 2,000 3,020
Welding hours 1,200 2,900
Batches 405 405
Number of inspections 465 370
Machine hours 2,350 5,300
Setups 80 80
Rework orders 100 50
Purchase orders 350 175
Required:
1.
Determine departmental overhead rates and compute the overhead cost per unit for each product line. Base your overhead assignment for the components department on machine hours. Use welding hours to assign overhead costs to the finishing department. Assign costs to the support department based on number of purchase orders.(Round your intermediate calculations and per unit cost answers to 2 decimal places.)
2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $210 for Model 145 and $150 for Model 212. (Round your intermediate calculations and cost per unit answers to 2 decimal places.
Answer:
I think it would be 576,676 and for the second one 870,34
Explanation:
Hopefully I was right
Stephen plans to purchase a car 5 years from now. The car will cost $43,011 at that time. Assume that Stephen can earn 7.11 percent (compounded monthly) on his money. How much should he set aside today for the purchase?
Answer:
$30,174.74
Explanation:
The computation of present value is shown below:-
Future value = Present value × (1 + Rate of interest ÷ 1200)^12 × time period
$43,011 = Present value × (1 + 7.11 ÷ (12 × 100)^(12 × 5)
$43,011 = Present value × (1 + 7.11 ÷ 1,200)^60
$43,011 = Present value × (1 + 0.005925 )^60
Present value = $43,011 ÷ (1 + 0.005925 )^60
= $43,011 ÷ (1.005925 )^60
= $43,011 ÷ 1.425397857
= $30,174.73317
or
= $30,174.74
Therefore for computing the present value we simply applied the above formula.
We also attached the spreadsheet for better understanding
In compounded monthly, the interest rate is divided by 12 months and the time period is multiplied by 12 months and the same is to be considered
Maritime Marine Company has total estimated factory overhead for the year of $986,800, divided into four activities: fabrication, $386,400; assembly, $207,900; setup, $112,000; and inspection, $280,500. Maritime manufactures two types of boats: a speedboat and a bass boat. The activity-base usage quantities for each product by each activity are as follows:
Fabrication Assembly Setup Inspection
Speedboat 1,200 dlh 1,800 dlh 60 setups 600 inspections
Bass boat 1,800 1,200 100 200
3,000 dlh 3,000 dlh 160 setups 800 inspections
Required:
a. Determine the activity rates for each activity.
b. Determine the factory overhead cost per unit for each product, using activity-based costing.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Estimated costs:
fabrication= $386,400
assembly= $207,900
setup= $112,000
inspection= $280,500.
Fabrication Assembly Setup Inspection
Speedboat: 1,200 dlh 1,800 dlh 60 setups 600 inspections
Bass boat: 1,800 1,200 100 200
3,000 dlh 3,000 dlh 160 setups 800 inspections
First, we need to calculate the overhead rate for each activity:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
fabrication= 386,400/3,000= $128.8 per direct labor hour
assembly= 207,900/3,000= $69.3 per direct labor hour
setup= 112,000/160= $700 per setup
inspection= 280,500/800= $350.63 per inspection
Now, we can allocate overhead to each product:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Speedboat= 1,200*128.8 + 1,800*69.3 + 60*700 + 600*350.63
Speedboat= $531,678
Bass boat= 1,800* 128.8 + 1,200*69.3 + 100*700 + 200*350.63
Bass boat= 455,126
Which journal entry reflects the following transaction?:
BOC bought a $300,000 building with $50,000 cash and a mortgage taken from a bank.
a. Dr. Building 300,000
Cr. Mortgage 250,000
Cr. Cash 50,000
b. Dr. Mortgage 250,000
Dr. Cash 50,000
Cr. Building 300,000
c. Dr. Cash 50,000
Cr. Building 300,000
d. Dr. Building 300,000
Cr. Cash 50,000
e. Dr. Building 300,000
Cr. Cash 300,000
Answer:
The correct answer is Option A.
Explanation:
The concept of double entry says for every debit entry, there must be a corresponding credit entry. This is necessary for the journal entries to balance, that is, the total of the debit balance must always equal the credit balance.
The building purchased by BOC is an asset. So there is need to debit that account to recognize the asset. Since there was an outflow of cash to the tune of $50,000, we need to credit cash while the remaining balance being financed by mortgage will be credited to recognize the liability.
The following information is available for Barkley Company: 2017 2016 Accounts receivable $ 360,000 $400,000 Inventory 280,000 320,000 Net credit sales 3,000,000 1,400,000 Cost of goods sold 1,200,000 1,060,000 Net income 300,000 170,000 Calculate the inventory turnover for 2017. 4.0 times 2.0 times 2.4 times 4.3 times
Answer:
4.0 times
Explanation:
Given that,
2016:
Accounts receivables = $400,000
Inventory = 320,000
Net credit sales = 1,400,000
Cost of goods sold = 1,060,000
Net income = 170,000
2017:
Accounts receivables = $360,000
Inventory = 280,000
Net credit sales = 3,000,000
Cost of goods sold = 1,200,000
Net income = 300,000
Inventory turnover ratio refers to the ratio between the cost of goods sold and average inventory.
Average inventory:
= (Beginning inventory + Ending inventory) / 2
= ($320,000 + $280,000) / 2
= $300,000
Therefore, the inventory turnover ratio for 2017 is as follows:
= Cost of goods sold / Average inventory
= 1,200,000 / 300,000
= 4.0 times
22. Communication that takes place between a manager and employees of other workgroups is called ………… communication.
23. Business depends on communication.
True or False
24. For many businesses and non-profit and government organizations, communication and information are not important to survive.
True or False
25. Strong communication skills are NOT vital for professionals in the business world.
True or False
26. Nonverbal communication means that a message is written rather than spoken.
True or False
27. Effective communication is a key to success in business.
True or False
28. Communication ability consistently ranks last among the skills that employers look for in college graduates.
True or False
29. Because of automation and restructuring, managers are likely to take care of their own writing, data entry, and phone calls rather than relying on secretarial support.
True or False
30. Form letters can be used in all business writing situations.
True or False
31. The higher you rise in an organization, the less you will be able to rely on form letters.
True or False
32. Form letters are a good solution for high-level professionals who need to deal with non-routine situations quickly and efficiently.
True or False
33. Communication is the exchange of information between a sender and a receiver.
True or False
34. In organizations, only top managers are sources of information or messages.
True or False
35. Encoding is the receiver's response to the sender's message.
True or False
36. The terms verbal communication and oral communications are interchangeable.
True or False
37. Communication must include a verbal component.
True or False
37. Decoding is the process of converting a message into symbols that people will understand.
True or False
38. The main advantage of written communication is that it provides a permanent record of a message.
True or False
39. Communication outside an organization is more important than communication inside an organization
True or False
40. The goal of establishing a favourable relationship between the sender and the receiver is appropriate for internal communication but not the external communication
True or False
Answer:
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Network economics Select one: A. applies the law of diminishing returns to communities of users. B. balances the high cost of adding new members to a community against the lower cost of using network infrastructure. C. sees the cost of adding new members as inconsequential. D. applies traditional economics to networked usersh
Answer:
C. sees the cost of adding new members as inconsequential
Explanation:
Network Economics is a situation where a business accrues benefits through feedback that is provided by the who use the businesses product or service. It is a product of the network effect, an increase in the value of a good or service increases as the number of buyers or subscribers goes up.
The type of rice that holds its shape best after cooking is
Answer:
parboiled
Explanation:
Parboiled rice (also called converted rice and easy-cook rice) is rice that has been partially boiled in the husk. The three basic steps of parboiling are soaking, steaming and drying.
Akwamba made this statement ‘organisations cannot be successful if managers fail to pay attention to the forces in the external environment’. Do you agree or not? Justify using practical examples (9 marks)
Answer:
Yes, I agree.
Find explanation below.
Explanation:
The external environment of a business simply refers to the factors found outside the business which can have a profound effect on it. There are basically two types of external environments, namely;
1. The directly interactive which has a direct impact on the business. Examples include, business owners, the customers, contractors, and competitors.
2. Indirectly interactive whose impact on the business is not immediate. Examples include, the political , socio-cultural, economic influences among others.
Practical Examples:
1. Customers play a crucial role to the running of businesses. Managers must take care to listen to the concerns of the customers and attend to their needs urgently. For example, if a customer complains about his dissatisfaction with a style of service, managers should endeavor to address the concern to avoid losing the customer.
2.Political: Government rules and regulations have an impact on businesses because, not adhering to them could lead to sanctions and even closure of the business. Managers must ensure that they heed to and comply with governmental instructions, such as tax payment.
Prepare Natura Co.’s journal entries to record the following transactions involving its short-term investments in held-to-maturity debt securities, all of which occurred during the current year. a. On June 15, paid $120,000 cash to purchase Remed’s 90-day short-term debt securities ($120,000 principal), dated June 15, that pay 5% interest. b. On September 16, received a check from Remed in payment of the principal and 90 days' interest on the debt securities purchased in transaction a. (Use 360 days in a year. Do not round your intermediate calculations.)
Answer: The answer has been attached below.
Explanation:
A journal entry is the record of the business transactions in an accounting books of a business. It is the first step in accounting cycle. The journal details all the financial transactions of a business. The accounts are either recorded in the credit or the debit side of accountings.
The calculation has been attached. Kindly note that the interest was gotten thus:
= 120,000 × 5% × 90/360
= 120,000 × 0.05 × 0.25
= 1500
The journal entry for the whole transactions has been attached.
Carlberg Co.’s March 31 inventory of raw materials is $105,000. Raw materials purchases in April are $590,000, and factory payroll cost in April is $428,000. Overhead costs incurred in April are: indirect materials, $90,000; indirect labor, $38,000; factory rent, $70,000; factory utilities, $29,000; and factory equipment depreciation, $56,000. The predetermined overhead rate is 70% of direct labor cost. Job 306 is sold for $760,000 cash in April. Costs of the three jobs worked on in April follow. Job 306 Job 307 Job 308 Balances on March 31 Direct materials $ 39,000 $ 50,000 Direct labor 30,000 23,000 Applied overhead 21,000 16,100 Costs during April Direct materials 145,000 235,000 $ 110,000 Direct labor 105,000 175,000 110,000 Applied overhead ? ? ? Status on April 30 Finished (sold) Finished (unsold) In process
Answer:
Job 306 is Cost of Goods Sold 403,500
Job 307 is Finished Goods Inventory 621,600
Job 308 Is Goods Still in Process 287,000
Explanation:
Carlberg Co.
Cost of Goods Manufactured
For the Month of April
Opening Inventory Raw Materials $105,000
Purchases Raw Materials $ 590,000
Less Ending Inventory $ 205,000
Direct Materials Used 490,000 (145,000+235,000 + $ 110,000 )
Direct Labor 390,000 (105,000+ 175,000 + 110,000)
Applied Overhead (70% of DL) 273,000
Total Manufacturing Costs $ 1153,000
Add Work in Process Mar 31 169,100
Cost of Goods Available For Manufacture 1322,100
Less Work in Process April 30 287,000
Cost of Goods Manufactured $1035,100
We add the balances to get the required figures and then find out the cost of goods manufactured.
31 March Balances
Job 306 Job 307 Job 308
Direct materials $ 39,000 $ 50,000 ----
Direct labor 30,000 23,000 -----
Applied overhead 21,000 16,100 -----
Beginning WIP 80,000 89,100
Costs during April
Direct materials 145,000 235,000 $ 110,000
Direct labor 105,000 175,000 110,000
Applied overhead 73,500 122,500 77,000
Costs Added In April 323,500 532,500 287,000
Total Costs 403,500 621,600 287,000
Status On April 30 Finished Finished In Process
(sold) (unsold)
Cost Of Goods Finished Goods Goods In Process
Sold Inventory
Job 306 is Cost of Goods Sold
Job 307 is Finished Goods Inventory
Job 308 Is Goods Still in Process
A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts: Accounts receivable $ 361,000 debit Allowance for uncollectible accounts 560 debit Net Sales 806,000 credit All sales are made on credit. Based on past experience, the company estimates 0.4% of net credit sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense
Answer:
Accounts receivable $361,000 debit
Allowance for uncollectible accounts $560 debit
Net Sales $806,000 credit
0.4% of credit sales are uncollectible = 0.4% x $806,000 = $3,224
adjusting entry:
December 31, 202x
Dr Bad debt expense 3,224
Cr Allowance for doubtful accounts 3,224
Allowance for doubtful accounts is a contra asset account that reduces accounts receivable.
You are the auditor for a company and need to review the company’s accounts receivable using probability proportional to size (PPS) sampling. In addition, the board of directors has requested that you and your team present an explanation of your PPS process at its next monthly meeting.
Individual Portion:
Use the following company data and the PPS Sampling Tables 1 & 2:
The recorded book value of these accounts is $3,460,000.
The company has a tolerable error of $63,460.
The anticipated error is $13,000.
The risk of incorrect acceptance is 5%.
The acceptable number of overstatements of misstatements is 2.
Use probability proportional to size (PPS) sampling to do the following:
Determine the reliability factor.
Determine the correct expansion factor.
Determine the sample size you should use.
Determine the sampling interval you should use.
Please add your file.
Your assignment will be graded in accordance with the following criteria. Click here to view the grading rubric.
Group Portion:
With your team of analysts, create a PowerPoint presentation of 7–10 slides to explain the following to the board of directors:
The objective of using probability proportional to size sampling (PPS) to test account balances
Specifically, how you used PPS to test this company's account balances
The purpose of the sample size and the sampling interva
Answer:
A.Reliability factor = 3.0
B Expansion factor =1.6
C.$ 243.31
D.$ 14220.541
E.Using dollars as a sampling units means that the larger dollar items in the account balance are more and most likely to be selected in the sample
F.To use PPS , the auditor must determine the allowable risk of the sample falling to in order to easily and effectively detect a material misstatement.
G.The purpose of the Sample size (n) is to help determine the Sampling interval (k
The purpose of the Sampling Interval is important to know the sampling length to cover the Population
Explanation:
A) Reliability Factor can be determined by using a reliability factor table which has a risk of incorrect acceptance of let say 5% and 0 overstatements for the aim of determining sample sizes as well as the sampling interval
Hence,
Reliability factor = 3.0
B) Expansion Factor can be determined by using an expansion factor table by given risk of incorrect acceptance of 5% the Expansion factor will be :
= 1.6
C) The formula for Sample size is:
Sample size= (Book value of population * Reliability Factor)/(Total misstatement - (Expected misstatement*Expansion factor))
Let plug in the formula
where,
Book value of population = $3,460,000
Reliability Factor = 3.0
The misstatement total = $63,460
The misstatement expected= $13,000
Expansion factor = 1.6
Sample Size = ($ 3,460,000 *3.0) / {$63,460 - ($13,000 * 1.6)}
= $ 10,380,000/$ 42,660
= $ 243.31
D) Formula for Sampling interval
Sampling interval= Book value of population/Sample size
Let plug in the formula
where: Book value of population = $3,460,000
Hence:
Sampling interval = $ 3,460,000/$ 243.31
=$ 14220.541
E) The Objective Of Using Probability Proportional to Size (PPS) Sampling In Account Balances are;
The Dollar-based sampling approach where the population is said to be the number of dollars in the account balance has been examined.
Therefore when the dollars is been used as a sampling units it can be said to means that the larger dollar items in the account balance are more and most likely to be selected in the sample.
PPS can be seen as a reliable sampling approach in a situation where the auditor is testing for overstatements.
Therefore Appropriate when few misstatements are expected as well as when individual book values are available
F) The Probability Proportional sampling is a reliable sampling approach when the auditors is testing for overstatement.
Therefore in order to use PPS , the auditor must determine the allowable risk of the sample falling to in order to easily and effectively detect a material misstatement
Test of detail risk
Detection risk can be defined as the risk in which the substantive audit procedures will fail to detect material misstatement
High Inherent risk cannbe defined as the way in which the auditor is examining transactions that are susceptible to misstatement.
Therefore Auditor want to be more careful while determining sample procedures
To easily achieve the lower risk of failing to detect , the sample size mist be increased
PPS sample are usually been selected using a fixed interval sampling approach
G) The aim of the Sample size (n) is to help determine the Sampling interval (k) which is why the Sample size is can be seen as the collection of consecutive integers which are is part of the Population (N) used for analysis having resembling characteristics.
Sampling interval (k) can therefore be defined as length of string of the consecutive integers and the length of string of sample collection is determined through Population and the Sample Size through formula (k =N/n).
Therefore the purpose of the Sampling Interval is important to know the sampling length to cover the Population.
Example:
Population : 1 – 300 numbers
Sample size : 10 numbers ie. 1-20, 21-30, 31-40,……
The price charged by the theater for a ticket to the Broadway show Hamilton is so low that there is a huge excess demand for the tickets. Ticket brokers buy these tickets at the low price charged by the theater, and they resell them at much higher prices. These ticket brokers have used illegal software called "ticket bots" to buy tickets.In an effort to thwart the use of this software, theaters are now requiring buyers to type characters into a box to prove that they are human. This new policy, requiring people to type characters into a box, will have an impact on the market for Hamilton theater tickets. Below is a list of possible impacts. Move the impacts that will result from the requirement that buyers type characters into the box labeled "Will Occur." Move the impacts that should not occur into the box labeled "Will Not Occur."
Answer:
Will not occur:
- ticket brokers will not be able to obtain tickets to resell
- ticket brokers will hire human workers from other countries
Explanation:
Indeed, it is not logical to conclude that this ticket brokers will not be able to still resell tickets using other fraudulent ways.
Going to hire workers from another country would be a very expensive option that seems more likely not going to occur.
Mineral-rich Zambia is one of the world's most important sources of uranium. It also is a source of copper, tin, diamonds (mainly industrial), gold, cobalt and zinc. Agricultural products include palm oil and kernels, cottonseed, rubber, cotton lint, coffee, peanuts, sweet potatoes, yams, and cassava. How many cotton products does Zambia produce?
A. Two
B. One
C. Three
D. Six.
Answer:
A. Two
Explanation:
The number of cotton products 1 produced is as follows
1. Cottonseed
2. Cotton lint
These two products are produced by cotton and also it contains the name of cotton
Therefore all other products are not considered
hence, the first option is correct
All other information i.e given in the question is not relevant. Hence, ignored it
Answer:
i did this one before the answer should be 2
Explanation:
Which of the following statements about process efficiency is FALSE? Multiple Choice Cost of direct labor goes up if flow rate goes up. A process is efficient if it is able to achieve a high flow rate with few resources. Cycle time goes up if flow rate goes down. Revenue goes up if flow rate goes up.
Answer:
Cost of direct labor goes up if flow rate goes up
Explanation:
As we know that
Cost of direct labor = Wages per unit of time ÷ Flow Rate
This cost of direct labor implies that whenever the flow rate rises, the cost of direct labor will decline that depicts the negative relationship between them and if the flow rate declines, the cost of direct labor increases
Moreover, by dividing the wages per unit of time from the flow rate we can get the cost of direct labor
Therefore, the first option is correct that shows the given statement is false regarding the process efficiency
Mango Company applies overhead based on direct labor costs. For the current year, Mango Company estimated total overhead costs to be $600,000, and direct labor costs to be $300,000. Actual overhead costs for the year totaled $615,000, and actual direct labor costs totaled $335,000. At year-end, the balance in the Factory Overhead account is a:
Answer:
55,000 Credit balance
Explanation:
Mango Company
Predetermined overhead rate /Estimated overhead cost
= $600,000 / $300,000
Estimated direct labor cost = 200%
Applied overhead :
=Actual direct labor cost of $335,000 × 200%
= $670,000
Overhead incurred-Overhead applied
$615000 – $670,000
=$55,000
Therefore At year-end, the balance in the Factory Overhead account is a: credit of $55,000
Answer:
Factory Overhead Balance= $55,000.
Explanation:
Over-applied overhead = Assigned Overhead − Actual Overhead
Where Assigned Overhead= Actual Direct Labor×Overhead rate
Where Overhead rate = Estimated overhead / Estimated Direct Labor * 100
Overhead rate= 600000/300000 * 100
Overhead Rate= 200%
Assigned Overhead = 335,000 * 200%
Assigned Overhead = 670,000
Therefore, the assigned overhead to be applied is $670,000.
Now, Over-applied overhead = Assigned Overhead − Actual Overhead
Factory Overhead = $670,000 - $615,000
Factory Overhead Balance= $55,000.
Rojas Corporation’s comparative balance sheets are presented below.
ROJAS CORPORATION
Comparative Balance Sheets
December 31
2017
2016
Cash
$ 14,600
$ 10,600
Accounts receivable
21,600
23,400
Land
20,400
26,000
Buildings
70,100
70,100
Accumulated depreciation—buildings
(15,000
)
(10,500
)
Total
$111,700
$119,600
Accounts payable
$ 12,700
$ 28,300
Common stock
75,200
71,200
Retained earnings
23,800
20,100
Total
$111,700
$119,600
Additional information:
1. Net income was $22,500. Dividends declared and paid were $18,800.
2. No noncash investing and financing activities occurred during 2017.
3. The land was sold for cash of $4,500.
Rojas Corporation’s comparative balance sheets are
Rojas Corporation’s comparative balance sheets are
(a) Prepare a statement of cash flows for 2017 using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000, or in parenthesis e.g. (15,000).)
Compute free cash flow. (Enter negative amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Answer:
Excerpt from Duty, Honor, Country / Every Man a King
General Douglas MacArthur / Huey P. Long
Duty, Honor, Country / Every Man a King
By: General Douglas MacArthur / Huey P. Long
Explanation:
A balance sheet is a financial statement that lists the assets and liabilities of a corporation at a certain point in time.
What is balance sheet?It is one of the three primary financial statements—the other two being the income statement and cash flow statement—that are used to assess a company's performance.
Investors and other stakeholders can use a balance sheet as a reference to assess an organization's financial standing. They can use it to compare current assets and liabilities to assess the company's liquidity or evaluate its return on investment.
Stakeholders can also comprehend the company's prospects with the help of this information. A balance sheet is a financial statement that lists the assets and liabilities of a corporation at a certain point in time.
Therefore, A balance sheet is a financial statement that lists the assets and liabilities of a corporation at a certain point in time.
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For each of the following, compute the future value: (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Present Value Years Interest Rate Future Value
$ 2,550 8 18 % $
9,653 21 10 $
101,305 15 11 $
239,382 27 5 $
Answer:
$9585.09
$71,434.61
$484.702.84
$893,722.24
Explanation:
The formula used in calculating future value is given as :
FV = P (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
1. $ 2,550 (1 + 0.18)^8 = $9585.09
2. 9,653 (1 + 0.1)^21 = $71,434.61
3. 101,305 (1 + 0.11)^ 15 = $484.702.84
4. 239,382(1 + 0.05)^27 = $893,722.24
I hope my answer helps you
Exposition, Inc. had 200 units of inventory on hand at the end of the year. These were recorded at a cost of $14 each using the last-in, first-out (LIFO) method. The current replacement cost is $10 per unit. The selling price charged by Exposition, Inc. for each finished product is $16. As a result of recording the adjusting entry as per the lower-of-cost-or-market rule, the gross profit will ________. Group of answer choices increase by $2,000 decrease by $2,000 increase by $800 decrease by $800
Answer:
decrease by $800
Explanation:
The computation of the gross profit is calculated below:
= Number of inventory units on hand at the end of the year × (Cost per unit - current replacement cost per unit)
= 200 units × ($14 - $10)
= 200 units × $4
= $800
This $800 represents the decrease in gross profit and the same is to be considered
hence, the last option is correct
Apple, Inc. reported research and development expense of $10,045 million on its 2016 income statement. This expense included many types of costs. Which of the following types of costs would not be included in the $10,045 million? Group of answer choices Salaries and wages for R&D personnel Costs of applying for FDA approval Depreciation on equipment used in experiments Supplies and inventory related to R&D activities and new-product sales None of the above
Answer:
Supplies and inventory related to R&D activities and new-product sales
Explanation:
In the given scenario Apple has reported a research and development expense of $10,045 million in 2016.
Only items related exclusively to reasearch and development activities will be included in this amount. This will include:
-Salaries and wages for R and D staff
-Costs of applying for FDA approval
-Depreciation on equipment used in experiments
These are exclusively for R and D purposes.
However Supplies and inventory related to R&D activities and new-product sales, also includes sales activities. So it will not be part of the R and D expense.
For its fiscal year ending October 31, 2022, Swifty Corporation reports the following partial data shown below. Income before income taxes $545,400 Income tax expense (20% × $424,200) 84,840 Income from continuing operations 460,560 Loss on discontinued operations 121,200 Net income $339,360 The loss on discontinued operations was comprised of a $50,500 loss from operations and a $70,700 loss from disposal. The income tax rate is 20% on all items. Prepare a correct statement of comprehensive income, beginning with income before income taxes.
Answer:
Swifty Corporation
Statement of Comprehensive Income
October 31, 2022
Income before income taxes $545,400
Income tax expense ($109,080)
Income from continuing operations $436,320
Other comprehensive income (loss):
Loss on discontinued operations ($50,500)
Related tax $10,100
Loss from disposal of assets ($70,700)
Related tax $14,140
Other comprehensive income (loss) net of tax ($96,960)
Comprehensive Income $339,360
Explanation:
income before income taxes $545,400 x 20% = $109,080 tax expense
loss on discontinued operations $50,500 x 20% = $10,100 tax benefit
loss from disposal of assets $70,700 x 20% = $14,410 tax benefit
Swifty Corporation
Statement of Comprehensive Income
October 31, 2022
Income before income taxes $545,400
Income tax expense ($109,080) (20% of $545,400)
Income from continuing operations $436,320
Other comprehensive income (loss):
Loss on discontinued operations ($50,500)
Related tax $10,100 (20% of $50,500)
Loss from disposal of assets ($70,700)
Related tax $14,140
Other comprehensive income (loss) net of tax ($96,960)
Comprehensive Income $339,360
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You consider purchasing a new computing system, including networking, for your sales force for $112,000. The system has a 6-year useful life and no salvage value. Your sales force is expected to generate an additional $37,000 of net income before taxes and depreciation each year by using this upgraded system. The combined federal and state income tax rate = 40%, Annual inflation = 400.
A. Fill in the following table assuming MACRS depreciation rates.
Year Pre-Income Depreciation Taxable Tax After tax Inflation Real
Tax income owed income adjustment after tax
factor Income
1 $37,000 $22,400
2 $37,000
3 $37,000
4 $37,000
5 $37,000
6 $37,000
B. Ifyour MARR-15%, should you purchase this system based on your real after-tax income? Why or why not?
Answer:
I am sorry
Explanation:
I dont do business
The table is given and purchasing this system is not possible.
What is an income tax?A tax placed on people or organizations in relation to their earnings or profits is known as an income tax. Tax rates multiplied by income taxes are typically used to calculate income taxes. Tax rates might change depending on the payer's attributes and source of income.
Based on the income collected, personal income taxes are calculated. Typically, it is categorized as a direct tax since this burden is thought to fall on the those who pay it.
Total of the present value is given at $60538.00
The NPV for the same data will be at 460538
NPV = PV of real cash inflows - initial outflow
= $60538 - $112000
= -$51462
As the NPV that is calculated has reached at a negetive value, thus purchase is not viable for the company.
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Choose the correct answer in the following statements about financial and real assets.
a. Toyota takes out a bank loan to finance the construction of a new factory.
Toyota (Click to select) a (Click to select) asset—the factory. The loan is a (Click to select) asset that is (Click to select) in the transaction.
b. Toyota pays off its loan. Fies When the loan is repaid, the (Click to select) asset is (Cick to select) but the Click to select) 9 asset continues to exist
c. Toyota uses $10 million of cash on hand to purchase additional inventory of spare auto parts. The cash is a (Click to select asset that is traded in exchange for a ICk toslet asset, inventory
Answer: Please refer to Explanation
Explanation:
A financial asset is a non-physical asset that that gets it's value from a contract that was signed by the parties involved. Financial assets include Bonds, stocks and even cash amongst others.
Real Assets on the other hand are physical assets that can be seen and hence have an inherent value. Examples include buildings and cars.
a. Toyota creates a real asset- the factory. The loan is a financial asset that is created in the transaction.
The factory becomes a real Asset that is tangible and has an inherent value. The loan was created by an agreement between Toyota and the bank and so is a Financial Asset.
b. When the loan is repaid, the financial asset is destroyed but the real asset continues to exist.
When the loan is repaid, Toyota no longer owns that financial asset because it has gone back to the bank. However, the Real Asset which is the factory that they were able to build will remain with Toyota.
c. The cash is a financial asset that is traded in exchange for a real asset, inventory.
As already mentioned, cash is a financial asset. Inventory is a tangible substance with an inherent value not determined by a contract and so is a Physical Asset. Trading cash for Inventory is therefore trading a financial asset for a physical one.
