Fall Forward to Success: Expert Assistance for Accounting
28. Morro Bay Surfboards manufactures fiberglass surfboards. The sta
Morro Bay Surfboards manufactures fiberglass surfboards. The standard cost of direct materials and direct manufacturing labor is $225 per board. This includes 30 pounds of direct materials, at the budgeted price of $3 per pound, and 9 hours of direct manufacturing labor, at the budgeted rate of $15 per hour. Following are additional data for the month of July: Units completed 5,500 units Direct material purchases 190,000 pounds Cost of direct material purchases $579,500 Actual direct manufacturing labor-hours 49,000 hours Actual direct labor cost $739,900 Direct materials efficiency variance $ 1,500 F There were no beginning inventories. REQUIRED 1. Compute direct manufacturing labor variances for July. 2. Compute the actual pounds of direct materials used in production in July. 3. Calculate the actual price per pound of direct materials purchased. 4. Calculate the direct materials price variance.
29. Reba Dixon is a fifth-grade school teacher who earned a salary of $38,000 in 2014. She is 45 year...
Reba Dixon is a fifth-grade school teacher who earned a salary of $38,000 in 2014. She is 45 years old and has been divorced for four years. She received $1,200 of alimony payments each month from her former rtment building. This year Reba received $30,000 of rental husband. Reba also rents out a smal apa payments from tenants and she incurred $19,500 of expenses associated with the rental Reba and her daughter Heather (20 years old at the end of the year moved to Georgia in January ofthis year. Reba provides more than one-half of Heathers support. They had been living i n Colorado for the past 15 years, but ever since her divorce, Reb has been wanting to move back to Georgia to be closer to her fa mily. Luckily, last Decembe r, a teaching position opened up and Reba and Heather decided to make the moving company $2.010 to move their personal belongings, and she and Heather spent move. Reba paid a ng the 1.395 miles to Georgia. During the trip, Reba paid $143 for lodging and $85 for meals. two days drivi Reba's mother was so excited to have her daughter and granddaughter move back to Georgia that she gave Reba $3,000 to help out with the moving costs Reba rented a home in Georgia. Heather decided to continue living at home with her mom, but she time in January at a nearby university. She was awarded a $3.000 parti started attending school fu al tul On scholarship this year, and Reba helped out by paying the remaining $500 tuition cost. If possible, Reba thought it would be best to claim the education credit for these expenses. Reba wasn't sure if she would have enough items to help her benefit from itemizing on her tax return. However, she kept track of several expenses this year that she thought might qualify if she was able to itemize. Reba paid $2.600 in state income taxes and $6,500 in charitable contributions during the year. She also paid the following medical-related expenses for her and Heather: 4,795 nsurance premiums Medical care expenses 1100 Prescription medicine 350 Nonprescription medicine 100 New contact le nses for Heather 200 Shortly after the move, Reba got distracted while driving and she ran into a street sign. The accident caused $900 in damage to the car and gave her whiplash. Because the repairs were less than her insura deductible, she paid the entire cost of the repa Reba wasn't ab e to work for two months after the accident. Fortunately, she received $2,000 from her disability insurance. Her employer, the Central Georgia School District, paid 60 percent of the premiums on the policy as a nontaxable fringe benefit and Reba paid the remaining 40 percent portio A few years ago, Reba acquired several investments with her portion of the divorce settlement. This year she reported the following income from her investments: $2,200 of interest income from corporate bond and $1,500 interest income from City of Denver municipal bonds. Overall, Reba's stock portfolio appreciated by 12,000 but she did not sell any of her stocks Heather reported $3,200 of in terest income from corporate bonds she received as gifts from her fathe er the last several years. This was Heather's only source of income for the year. Reba had $10,000 of federal income taxes withheld by her employer. Heather made $500 of estimated yments during the year. Reba did not make any estimated payments
Rusty Co. sells two products, X and Y. Last year Rusty sold 5,000 units of X’s and 35,000 units of Y’s. Related data are:
Unit Selling Price
Unit Variable
Unit contribution
Product
Price
Cost
Margin
X
$110.00
$70.00
$40.00
Y
70.00
50.00
$20.00
____ 10. Assuming that last year’s fixed costs totaled $675,000. What was Rusty Co.’s break-even point in units?
a.
16,875 units
b.
30,100 units
c.
30,000 units
d.
11,250 units
31. Break-even analysis is of limited use to management because a
Break-even analysis is of limited use to management because a company cannot survive by just breaking even. Do you agree? Explain.
32. Herbal Care Corp., a distributor of herb-based sunscreens, is ready to begin its third quarter, i...
Herbal Care Corp., a distributor of herb-based sunscreens, is ready to begin its third quarter, in which peak sales occur. The company has requested a $40,000, 90-day loan from its bank to help meet cash requirements during the quarter. Since Herbal Care has experienced difficulty in paying off its loans in the past, the loan officer at the bank has asked the company to prepare a cash budget for the quarter. In response to this request, the following data have been assembled a. On July 1, the beginning of the third quarter, the company will have a cash balance of $44,000 b. Actual sales for the last two months and budgeted sales for the third quarter follow (all sales are orn account) May (actual) June (actual) July (budgeted) August (budgeted) September (budgeted) 220,000 $260,000 $ 380,000 600,000 $ 310,000 Past experience shows that 25% of a month's sales are collected in the month of sale, 70% in the month following sale, and 3% in the second month following sale. The remainder is uncollectible. c. Budgeted merchandise purchases and bu dgeted expenses for the third quarter are given below: July $228,000 $ 39,000 $140,000 $ 6,200 $ 6,500 August September Merchandise purchases Salaries and wages Advertising Rent payments Depreciation $360,000 $186,000 46,000 $ 47,000 $119,000$ 87,000 6,200 $ 6,200 6,500 6,500 Merchandise purchases are paid in full during the month following purchase. Accounts payable for merchandise purchases on June 30, which will be paid during July, total $156,000 d. Equipment costing $10,000 will be purchased for cash during July e. In preparing the cash budget, assume that the $40,000 loan will be made in July and repaid in September. Interest on the loan will total $1,200. Required 1. Prepare a schedule of expected cash collections for July, August, and September and for the quarter in total
33. 1. Assuming the company has no alternative use for the facilities that are now being used to prod...
1. Assuming the company has no alternative use for the facilities that are now being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 22,000 carburetors from the outside supplier? 2. Should the outside supplier’s offer be accepted? 3. Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed capacity to launch a new product. The segment margin of the new product would be $220,000 per year. Given this new assumption, what would be financial advantage (disadvantage) of buying 22,000 carburetors from the outside supplier? 4. Given the new assumption in requirement 3, should the outside supplier’s offer be accepted?
34. How do I determine the percent of total appraised value? I thought I was supposed to take the...
How do I determine the percent of total appraised value? I thought I was supposed to take the Appraised Value and divide it by Total Cost of Acquisition but that doesn't seem to be correct.
35. 1. The classification of a lease as either an operating or finance lease is based on (a) The length.
1. The classification of a lease as either an operating or finance lease is based on (a) The length of the lease. (b) The transfer of the risks and rewards of ownership. (c) The minimum lease payments being at least 50% of the fair value. (d) The economic life of the asset. 2. The accounting concept that is principally used to classify leases into operating and finance is (a) Substance over form. (b) Prudence. (c) Neutrality. (d) Completeness. 3. Which of the following situations would prima facie lead to a lease being classified as an operating lease? (a) Transfer of ownership to the lessee at the end of the lease term. (b) Option to purchase at a value below the fair value of the asset. (c) The lease term is for a major part of the asset’s life. (d) The present value of the minimum lease payments is 50% of the fair value of the asset.
36. XYZ Inc. owns a fleet of over 100 cars and 20 ships. It operates in a capital-intensive industry and...
XYZ Inc. owns a fleet of over 100 cars and 20 ships. It operates in a capital-intensive industry and thus has significant other property, plant, and equipment that it carries in its books. It decided to revalue its property, plant, and equipment. The company’s accountant has suggested the alternatives that follow.
Which one of the options should XYZ Inc. select in order to be in line with the provisions of IAS 16?
(a) Revalue only one-half of each class of property, plant, and equipment, as that method is less cumbersome and easy compared to revaluing all assets together.
(b) Revalue an entire class of property, plant, and equipment.
(c) Revalue one ship at a time, as it is easier than revaluing all ships together.
(d) Since assets are being revalued regularly, there is no need to depreciate.
37. comprehensive problem 2 chapter 6 Warren Reeve and Duchac
I need to know in a simple format the answers to comprehensive problem 2 in chapter 6.
Kinkaid Co. is incorporated at the beginning of this year and engages in a number of transactions. The following journal entries impacted its stockholders' equity during its first year of operations. Credit Debit 270,000 a. General Journal Cash Common Stock, $25 Par Value Paid-In Capital in Excess of Par Value, Common Stock 235,000 35,000 b. 160,000 Organization Expenses Common Stock, $25 Par Value Paid-In Capital in Excess of Par Value, Common Stock 127,000 33,000 43,500 15,500 82,400 Cash Accounts Receivable Building Notes Payable Common Stock, $25 Par Value Paid-In Capital in Excess of Par Value, Common Stock 59,800 51,600 30,000 d. 148,000 Cash Common Stock, $25 Par Value Paid-In Capital in Excess of Par Value, Common Stock 79,000 69,000 Required: 2. How many shares of common stock are outstanding at year-end? 3. What is the amount of minimum legal capital (based on par value) at year-end? 4. What is the total paid-in capital at year-end? 5. What is the book value per share of the common stock at year-end if total paid-in capital plus retained earnings equals $799,000? Complete this question by entering your answers in the tabs below. Reg 2 to 4 Req 5 How many shares of common stock are outstanding at year-end? What is the amount of minimum legal capital (based on par value) at year-end? What is the total paid-in capital at year-end? 2. Number of outstanding shares 3. Minimum legal capital 4. Total paid-in capital Req 2 to 4 Req5 > Complete this question by entering your answers in the tabs below. Reg 2 to 4 Req 5 What is the book value per share of the common stock at year-end if total paid-in capital plus retained earnings equals $799,000? Book Value per Common Share 1 Choose Denominator: Choose Numerator: = Book Value per Common Share Book value per common share
39. Managerial Accounting Garrison 13th Ed, Chpt 9-22
Chapter 9-22 Managerial Accounting Garrison 13th Ed Springfield Corporation operates on a calendar year basis. It begins the annual budgeting process in late august, when the president establishes targets for total sales dollars and net operating income before taxes for the next year. The sales target...
Chapter 3 Homework
MA.03.01
PR.03.01A.Algo
PR.03.02A.Algo
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PR.03.13A.Algo
PR.03.14A.Algo
PR.03.15A.Algo
PR.03.16A.Algo
PR.03.17A.Algo
MP.03.03.Step1.and.Step2
MP.03.03.Step3.and.Step4
MP.03.03.Step5
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Progress:19/22 items
Calculator
Determining the employees' FICA withholding amount
Learning Objective 3:
Apply the current tax rates and wage base for FICA and SECA purposes
There are two required calculations for determining the employees' FICA withholding amount, OASDI and HI. OASDI stands for "Old Age Survivors and Disability Income," more commonly called "Social Security." HI stands for "Hospital Insurance," more commonly known as "Medicare."
HI is the easier calculation of the two. It is simply a fixed percentage of qualifying taxable wages for the period, currently set at 1.45%, with no annual cap on wages.
Gloria Sanchez earns a monthly salary of $13,500, which is paid monthly. So far this year, up to this pay period, she has earned $94,500.
To compute Gloria's HI withholding amount, simply multiply her wages for the period by the HI tax rate (currently 1.45%).
The current HI withholding rate:
1.45
%
Wages to date before this pay period:
$
84,000.00
Wages for this pay period:
$
12,000.00
Taxable Wage Limit:
$
NONE
Wages Paid to Date:
$
96,000.00
Taxable Wages this Pay:
$
12,000.00
Tax Rate:
×
1.45
%
HI Tax to Be Withheld:
$
174.00
Calculate HI withholdings
Now, you will calculate the HI withholding for Gloria's colleague Daniel Mercer. Daniel earns $10,500 per pay period, and has earned $73,500 up to this point. What will be his normal HI withholding?
If required, round your answers to the nearest cent.
The current HI withholding rate:
1.45
%
Wages to date before this pay period:
$
63,000.00
Wages for this pay period:
$
9,000.00
Taxable Wage Limit:
$
NONE
Wages Paid to Date:
$
Taxable Wages this Pay:
$
Tax Rate:
×
1.45
%
HI Tax to Be Withheld:
$
Feedback
41. At the end of February, after the second month of operations of Able Baker Charlie Company, Charl...
At the end of February, after the second month of operations of Able Baker Charlie Company, Charles shows you the data he’s collected, but he was unable to figure out some of the amounts. Review the data below and fill in the missing amounts on the chart for Able Baker Charlie Company. Note: It may be helpful to use T accounts to map the flow of the amounts through the manufacturing accounts and solve for the missing dollar values. It may also be helpful to review the steps for determining the cost of materials used, total manufacturing cost incurred, and cost of goods manufactured.
Data for February
Decrease in materials inventory
$3,300
Materials inventory on Feb. 28
50% of materials inventory on Jan. 31
Direct materials purchased
$12,600
Direct materials used
3 times the direct labor incurred
Total manufacturing costs incurred in period
$29,400
Total manufacturing costs incurred in period
70% of Cost of Goods Manufactured
Total manufacturing costs incurred in period
$7,000 less than Cost of Goods Sold
Account
Jan. 31
Feb. 28
Costs
Incurred
Materials Inventory
$
$
Direct Materials Used
$
Work in Progress Inventory
$27,000
$
Direct Labor Incurred
$
Finished Goods Inventory
$
$16,000
Factory Overhead Incurred
$
Cost of Goods Sold
$36,400
42. Hamilton Company uses job-order costing. Manufacturing overhead is applied using a predetermined...
Hamilton Company uses job-order costing. Manufacturing overhead is applied using a predetermined rate of 150% of direct labor cost. Any underapplied or overapplied manufacturing overhead is closed to Cost of Goods Sold at the end of each month. Additional information is available as follows:
43. 16. Which statement is true for gains and losses from capital asset sales? (a) They do not affect...
16. Which statement is true for gains and losses from capital asset sales?
(a) They do not affect cash and are excluded from the statement of cash flows.
(b) They are included in cash flows from operating activities.
(c) They are included in cash flows from investing activities.
(d) They are included in cash flows from financing activities.
44. A traditional costing system would allocate setup costs on the basis of DMLH. An ABC system would...
Hoger Corporation accumulated the following cost information for its two products, A and B:
A
B
Total
Production volume
2,000
1,000
Total direct man. labor hrs.
5,000
20,000
25,000
Setup cost per batch
$ 1,000
$2,000
Batch size
100
50
Total setup costs incurred
$20,000
$40,000
$60,000
DMLH per unit
2
1
A traditional costing system would allocate setup costs on the basis of DMLH. An ABC system would trace costs by spreading the costs per batch over the units in a batch. What is the setup cost per unit of product A under each costing system?
Traditional
ABC
a.
$4.80
$10.00
b.
$2.40
$10.00
c.
$40.00
$200.00
d.
$4.80
$20.00
The 9-percent-coupon-rate bonds of the Melbourne Mining Company have exactly 15 years remaining to maturity. The current market value of one of these $1,000-parvalue bonds is $700. Interest is paid semiannually. Melanie Gibson places a nominal annual required rate of return of 14 percent on these bonds. What dollar intrinsic value
should Melanie place on one of these bonds (assuming semiannual discounting)?
46. The company paid cash to Lyn Addie for five days’ work at the rate of $125 per day. Four of the...
The company paid cash to Lyn Addie for five days’ work at the rate of $125 per day. Four of the five days relate to wages payable that were accrued in the prior year. Which account do I debit and which account do I credit and how much is each ?
47. Dehner Corporation uses a job-order costing system with a single plantwide predetermined overhead...
Dehner Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor. hours. The Company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 94,000 $404,200 Total fixed manufacturing overhead cost Variable manufacturing overhead per direct labor-hour Recently, Job P951 was completed with the following characteristics: Number of units in the job 50 Total direct labor-hours 100 660 Direct materials $9,400 Direct labor cost The unit product cost for Job P951 is closest to:
Arlin Fabrication Company produces tools on a job order basis. During May, two jobs were completed, and the following costs were incurred: Other factory costs for the month totaled $16,800. Factory overhead costs are allocated one-third to Job 401 and two-thirds to Job 402. a. Describe two alternative methods for assigning the overtime premium cost to Jobs 401 and 402 and explain how the appropriate method would be determined. b. Compute the cost of Jobs 401 and 402 under each of the two methods described in part a.
49. Accounting Discussion
Discuss the following:
You are Dr. Jones' office manager. He comes to you with a new Cigna contract that he just
received in the mail. He wants you to review the contract and tell him if it is a good contract
or not.
Discuss what are you going to look for and why
50. 1. Neura Pharma, Inc. has purchased a drug patent with a remaining useful life of 13 years.
1. Neura Pharma, Inc. has purchased a drug patent with a remaining useful life of 13 years. How should this new asset be classified?
A current tangible asset
A non-current tangible asset
A non-current intangible asset
A current intangible asset
2. June Smith, a process engineer, has sold her 15-year patent for a new etching process to Silica Labs, Inc. In return, she has received $500,000 in cash and, based on its value on the sale date, $200,000 in common stock in Silica Labs. The stock is forecasted to double in market value over the next two months.
How would this transaction be recorded by Silica Labs?
Debit patent account $700,000; credit cash $500,000; credit common stock $200,000
Debit cash $500,000; debit common stock $200,000; credit patent account $700,000
Debit cash $500,000; credit patent account $500,000
Debit patent account $500,000; credit cash $500,000
3. Consider the same scenario as in the previous question:
June Smith, a process engineer, has sold her 15-year patent for a new etching process to Silica Labs, Inc. In return, she has received $500,000 in cash and, based on its value on the sale date, $200,000 in common stock in Silica Labs. The stock is forecasted to double in market value over the next two months.
Assuming that Silica Labs holds some long-term debt, which of the following describes the effect of the transaction on Silica Labs?
Current ratio will decrease and total debt to equity ratio will increase
Current ratio will increase and total debt to equity ratio will decrease
Current ratio will increase and total debt to equity ratio will increase
Current ratio will decrease and total debt to equity ratio will decrease
4. Lucky Lee, a video-game store in New York city, purchases a game machine directly from Taiwan for $30,000. In the U.S., the same machine will probably cost at least $36,000. Pick the most appropriate accounting action for Lucky Lee:
Record the machine at $36,000
Record the machine at $30,000
Record the machine for [($30,000+$36,000)/2] = $33,000
Have the machine examined by an independent appraiser and record it at the appraised value