14. Hi-Tek Manufacturing Inc. makes two types of industrial component parts the B300 and the T500. An... Hi-Tek Manufacturing Inc. makes two types of industrial component parts the B300 and the T500. An absorption costing income statement for the most recent period is shown below Hi-Tek Manufacturing Inc Income Statement 1,768,000 Sales Cost of goods sold 1,222,427 Gross margin 545,573 600,000 Selling and administrative expenses (54,427) Net operating loss Hi-Tek produced and sold 60,000 units of B300 at a price of $21 per unit and 12,700 units of T500 at a price of $40 per unit. The company's traditional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the company's two product lines is shown below B300 T500 Total Direct materials 400,800 162,000 562,800 120,900 42,500 163,400 Direct labor Manufacturing overhead 496,227 Cost of goods sold 1,222,427 The company has created an activity-based costing system to evaluate the profitability of its products. Hi Tek's ABC implementation team concluded that $55,000 and $109,000 of the company's advertising expenses could be directly traced to B300 and T500, respectively. The remainder of the selling and administrative expenses was organization-sustaining in nature. The ABC team also distributed the company's manufacturing overhead to four activities as shown below: 15. Record long-term notes receivable and interest revenue (LO5–7) P5–8A On December 1, 2018, Liang... Record long-term notes receivable and interest revenue (LO5–7) P5–8A On December 1, 2018, Liang Chemical provides services to a customer for $90,000. In payment for the services, the customer signs a three-year, 10% note. The face amount is due at the end of the third year, while annual interest is due each December 1. Required: 1. Record the acceptance of the note on December 1, 2018. 2. Record the interest collected on December 1 for 2019 and 2020, and the adjustment for interest revenue on December 31 for 2018, 2019, and 2020. 3. Record the cash collection on December 1, 2021. 16. Forecast Sales Volume and Sales Budget Raphael Frame Company prepared the following sales budget... 1. Forecast Sales Volume and Sales Budget Raphael Frame Company prepared the following sales budget for 2016: Raphael Frame Company Sales Budget For the Year Ending December 31, 2016 Product and Area Unit Sales Volume Unit Selling Price Total Sales 8" × 10" Frame: East 8,500 $16 $136,000 Central 6,200 16 99,200 West 12,600 16 201,600 Total 27,300 $436,800 12" × 16" Frame: East 3,800 $30 $114,000 Central 3,000 30 90,000 West 5,400 30 162,000 Total 12,200 $366,000 Total revenue from sales $802,800 At the end of December 2016, the following unit sales data were reported for the year: Unit Sales 8" × 10" Frame 12" × 16" Frame East 8,755 3,686 Central 6,510 3,090 West 12,348 5,616 For the year ending December 31, 2017, unit sales are expected to follow the patterns established during the year ending December 31, 2016. The unit selling price for the 8" × 10" frame is expected to increase to $17 and the unit selling price for the 12" × 16" frame is expected to increase to $32, effective January 1, 2017. Required: 2. Compute the increase or decrease of actual unit sales for the year ended December 31, 2016, over budget. 3. Assuming that the increase or decrease in actual sales to budget indicated in part (1) is to continue in 2017, compute the unit sales volume to be used for preparing the sales budget for the year ending December 31, 2017. 4. Prepare a sales budget for the year ending December 31, 2017. 17. High Desert Potteryworks makes a variety of pottery products that it sells to retailers such as H... High Desert Potteryworks makes a variety of pottery products that it sells to retailers such as Home Depot. The company uses a job-order costing system in which predetermined overhead rates are used to apply manufacturing overhead cost to jobs. The predetermined overhead rate in the Molding Department is based on machine-hours, and the rate in the Painting Department is based on direct labor-hours. At the beginning of the year, the company’s management made the following estimates: Departm entMoldingPainting Direct labor-hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12,00060,000Machine-hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70,0008,000Direct materials cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$510,000$650,000Direct labor cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$130,000$420,000Fixed manufacturing overhead cost . . . . . . . . . . . . . . . . .$497,000$615,000Variable manufacturing overhead per machine-hour . . . .$1.50–Variable manufacturing overhead per direct labor-hour . .–$2.00 Job 205 was started on August 1 and completed on August 10. The company’s cost records show the following information concerning the job: DepartmentMoldingPainting Direct labor-hours . . . . . . . . . . . . . . . . . . . . . . . 3084Machine-hours . . . . . . . . . . . . . . . . . . . . . . . . . 11020Materials placed into production . . . . . . . . . . . $470$332Direct labor cost . . . . . . . . . . . . . . . . . . . . . . . . $325$588 Compute the predetermined overhead rate used during the year in the Molding Department. Compute the rate used in the Painting Department. 2. Compute the total overhead cost applied to Job 205. 3. What would be the total cost recorded for Job 205? If the job contained 50 units, what would be the unit product cost? 4. At the end of the year, the records of High Desert Potteryworks revealed the following actual cost and operating data for all jobs worked on during the year: 18. All of the x's are indications of answers that are wrong. All of the x's are indications of answers that are wrong. The following data are forthe two products produced by Tadros Company Product A Direct materials 15 pe $20 per unit unit Direct labor hours 0.4 DLH per unit 1.4 DLH per unit Machine hours 0.3 MH per unit 1.0 MH per unit 100 batches. Volume 10.000 units. 2.000 units Engineering modifications 9 modifications 45 modifications Number of customers 500 customers 400 customers Market price $35 $95 unit The company's directlabor rate is $20 per directlabor hour (DLH). Additional information follows. indirect manufacturing ngineering support 25,000 Engineering modifications lectricity 20.000 Machine hours Setup costs 41.000 Batches Non manufacturing Customer service 70.000 Number of customers Required: (Round your per unit cost answers to2decimalplaces and otheranswers to nearest whole number. Loss amounts should be indicated with minus sign) Answer is complete but not entirely correct Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours. S 1x 1.00 per direct labor hour v Overhead oosts Direct labor hours Plant wide oHrate Total overhead cost OH Cost per Overhead Assigned Units Produced ProductA 4000 12.05 50600 10.000 5.06 2000v s 1771 2,800 265 Product 35,420 ProductA Product B Total manufacturing cost per unit: Direct material cost per unit 1.00X 1.00 Direct labor cost per unit 1.00 1.00 Overhead cost per unit 17. 1.2 What is the gross profit per unit? Product A Product B Market price 3500 9500 Manufacturing costper unit G S 100x Gross profit per unit 1 How much gross profit is generated by each customer of Product A and Product Busing the plantwide overhead rate? Product A Product B 664 S 100 Gross profit per unit Units purchased per oustomer 204 Gross profit per customer 38.80 6.45 2 What is the cost of providing customer service to each customer? Customer service costs V 1.00 per customer Number of customers the gross profit adequate for each customer of Product A and Busing the plantwide overhead rate? Product A Product B 13880 S 11645 Gross profit per customer Customer service cost per customer Profit (loss) per customer is the profitadeguate? Cant be delerminedV 19. Net profit and cash flow for the year Problem: A firm has just ended the calendar year making a sale Net profit and cash flow for the year Problem: A firm has just ended the calendar year making a sale in the amount of $150,000 of merchandise purchased during the year at a total cost of $112,500. Although the firm paid full for the merchandise during the year, it has yet to collect at year end from the customer. The net profit and cash flow for the year are _____ $0 and $150,000 respectively, $37,500 and -$155,000 respectively, $37,500 and -$112,500 respectively, or $150,000 and $112,500 $37,500 respectively please advise answer & why? Net profit and cash flow for the year 20. Which of the following statements is true? Under variable costing, direct materials and direct l... Which of the following statements is true? Under variable costing, direct materials and direct labor are expensed as period expenses. Under variable costing, fixed manufacturing overhead is expensed as period expenses. Fixed manufacturing overhead costs are treated the same under both absorption costing and variable costing. Reported income under absorption costing is not affected by production level changes. Under absorption costing, fixed manufacturing overhead is expensed as period expenses. 21. On March 25, Osgood Company sold merchandise on account, $10,000, terms n/30. The applicable sale... On March 25, Osgood Company sold merchandise on account, $10,000, terms n/30. The applicable sales tax percentage is 7.5%. The cost of merchandise sold is $5, 950. Required: Record the transaction. Refer to the Chart of Accounts for exact wording of account titles. 22. Alpine Expeditions operates a mountain climbing school in Colorado. Some clients pay in advance... Alpine Expeditions operates a mountain climbing school in Colorado. Some clients pay in advance for services; others are billed after services have been performed. Advance payments are credited to an account entitled Unearned Client Revenue. Adjusting entries are performed on a monthly basis. An unadjusted trial balance dated December 31, 2011, follows. (Bear in mind that adjusting entries have already been made for the first 11 months of 2011, but not for December.) ALPINE EXPEDITIONS UNADJUSTED TRIAL BALANCE DECEMBER 31, 2011 Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,900 Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,000 Unexpired insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,000 Prepaid advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,200 Climbing supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,900 Climbing equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,600 Accumulated depreciation: climbing equipment . . . . . . . . . . . . . . . . . $ 38,400 Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,250 Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000 Interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200 Unearned client revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,600 Capital stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,000 Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,400 Client revenue earned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188,000 Advertising expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,400 Insurance expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,000 Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,500 Climbing supplies expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,400 Repairs expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,800 Depreciation expense: climbing equipment. . . . . . . . . . . . . . . . . . . . . 13,200 Salaries expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,200 Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 Income taxes expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,750 $328,000 $328,000 Other Data 1. Accrued but unrecorded fees earned as of December 31 amount to $6,400. 2. Records show that $6,600 of cash receipts originally recorded as unearned client revenue had been earned as of December 31. 3. The company purchased a 12-month insurance policy on June 1, 2011, for $36,000. 4. On December 1, 2011, the company paid $2,200 for numerous advertisements in several climbing magazines. Half of these advertisements have appeared in print as of December 31. 5. Climbing supplies on hand at December 31 amount to $2,000. 6. All climbing equipment was purchased when the business first formed. The estimated life of the equipment at that time was four years (or 48 months). 7. On October 1, 2011, the company borrowed $10,000 by signing an eight-month, 9 percent note payable. The entire note, plus eight months’ accrued interest, is due on June 1, 2012. 8. Accrued but unrecorded salaries at December 31 amount to $3,100. 9. Estimated income taxes expense for the entire year totals $14,000. Taxes are due in the first quarter of 2012. Instructions a. For each of the numbered paragraphs, prepare the necessary adjusting entry (including an explanation). b. Determine that amount at which each of the following accounts will be reported in the com- pany’s balance sheet dated December 31, 2011: 1. Cash 6. Climbing Equipment 10. Interest Payable 2. Accounts Receivable 7. Accumulated Depreciation: 11. Income Taxes Payable 3. Unexpired Insurance Climbing Equipment 12. Unearned Client 4. Prepaid Advertising 8. Salaries Payable 5. Climbing Supplies 9. Notes Payable Revenue 23. E2–19 Green Wave Company plans to own and operate a storage rental facility. For the first month... E2–19 Green Wave Company plans to own and operate a storage rental facility. For the first month of operations, the company has the following transactions. Required: 1. Record each transaction. Green Wave uses the following accounts: Cash, Supplies, Land, Equipment, Common Stock, Accounts Payable, Notes Payable, Service Revenue, and Salaries Expense. 2. Post each transaction to T-accounts and compute the ending balance of each account. Since this is the first month of operations, all T-accounts have a beginning balance of zero. 3. After calculating the ending balance of each account, prepare a trial balance. Record transactions, post to T-accounts, and prepare a trial balance (LO2–4, 2–5, 2–6) 24. Starz Department Store, Ltd. is located near the Towne Shopping Mall. At the end of the company s... Starz Department Store, Ltd. is located near the Towne Shopping Mall. At the end of the company s calendar year on December 31, 2017, the following accounts appeared in two of its trial balances. Instructions (a) Prepare an income statement, a retained earnings statement, and a classified statement of financial position. £16,000 of the mortgage payable is due for payment next year. (b) Journalize the adjusting entries that were made. (c) Journalize the closing entries that are necessary.2 25. Below are incomplete financial statements for cyclone,inc. how do I do the balance sheet? below are incomplete financial statements for cyclone,inc. how do I do the balance sheet? S. Cyclone, In Levenves 21,200 nt (0 1300 Net nue 4, 300 26. Prepare an adjusted trial balance at June 30, 2012. Tony Masasi started his own consulting firm, McGee Company, on June 1, 2012. The trial balance at June 30 is shown below. McGEE COMPANY Trial Balance June 30, 2012 Account Number Debit Credit 101 Cash $ 7,150 112 Accounts Receivable 6,000 126 Supplies 2,000 130 Prepaid Insurance 3,000 157 Equipment 15,000 201 Accounts Payable $ 4,500 209 Unearned Service Revenue 4,000 301 Owner’s Capital 21,750 400 Service Revenue 7,900 726 Salaries and Wages Expense 4,000 729 Rent Expense 1,000 $38,150 $38,150 In addition to those accounts listed on the trial balance, the chart of accounts for McGee Company also contains the following accounts and account numbers: No. 158 Accumulated Depreciation—Equipment, No. 212 Salaries and Wages Payable, No. 631 Supplies Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 732 Utilities Expense. Other data: 1. Supplies on hand at June 30 are $750. 2. A utility bill for $150 has not been recorded and will not be paid until next month. 3. The insurance policy is for a year. 4. $2,800 of unearned service revenue has been earned at the end of the month. 5. Salaries of $1,900 are accrued at June 30. 6. The equipment has a 5-year life with no salvage value. It is being depreciated at $250 per month for 60 months. 7. Invoices representing $1,200 of services performed during the month have not been recorded as of June 30. Instructions (a) Prepare the adjusting entries for the month of June. Use J3 as the page number for your journal. (b) Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances and place a check mark in the posting reference column. (c) Prepare an adjusted trial balance at June 30, 2012. 27. La Famiglia Pizzeria provided the following information for the month of October: Sales are budgeted... La Famiglia Pizzeria provided the following information for the month of October: 1. Sales are budgeted to be $157,000. About 85 percent of sales are cash; the remainder are on account. 2. La Famiglia expects that, on average, 70 percent of credit sales will be paid in the month of sale, and 28 percent will be paid in the following month. 3. Food and supplies purchases, all on account, are expected to be $116,000. La Famiglia pays 25 percent in the month of purchase and 75 percent in the month following purchase. 4. Most of the work is done by the owners, who typically withdraw $6,000 a month from the business as their salary. (Note: The $6,000 is a payment in total to the two owners, not per person.) Various part-time workers cost $7,300 per month. They are paid for their work weekly, so on average 90 percent of their wages are paid in the month incurred and the remaining 10 percent in the next month. 5. Utilities average $5,950 per month. Rent on the building is $4,100 per month. 6. Insurance is paid quarterly; the next payment of $1,200 is due in October. 7. September sales were $181,500 and purchases of food and supplies in September equaled $130,000. 8. The cash balance on October 1 is $2,147. If required, round to the nearest dollar.