Answer:
1. World Trade Organization
2. North American Free Trade Agreement
3. The European Union
Explanation:
a. World Trade Organization (WTO): Oversees trade agreements among over 150 member nations and arbitrates trade disagreements among member countries. The world trade organization (WTO) is an intergovernmental organization that set rules, policies and regulates global trade across the world. It was established officially on the 1st of January, 1995.
b. North American Free Trade Agreement (NAFTA): Created a free-trade zone consisting of the United States, Canada, and Mexico with the purpose of eliminating trade barriers between these countries. It officially became effective on the 1st of January, 1994.
c. The European Union (EU): An agreement between over 25 nations, which abolished tariffs among member countries and standardized policies on agriculture, transportation, and business practices. It was established officially on the 1st of November, 1993. Some of its member countries are Sweden, Italy, Germany, Portugal, Croatia, Russia, France, Spain, Netherlands etc.
Landhill Corporation is authorized to issue 49,000 shares of $5 par value common stock. During 2020, Sandhill took part in the following selected transactions.
1. Issued 4,500 shares of stock at $45 per share, less costs related to the issuance of the stock totaling $7,900.
2. Issued 1,100 shares of stock for land appraised at $49,000. The stock was actively traded on a national stock exchange at approximately $46 per share on the date of issuance.
3. Purchased 470 shares of treasury stock at $41 per share. The treasury shares purchased were issued in 2016 at $38 per share.
Required:
a. Prepare the journal entry to record item 1.
b. Prepare the journal entry to record item 2.
c. Prepare the journal entry to record item 3 using the cost metho
Answer: Please see answer in explanation column
Explanation:
1. Journal to record common stock issued
Account title Debit Credit
Cash $210,400
Common stock $22,500
Paid in capital in excess of par $187,900
common stock
Calculation:
Cash = 4,500 x $45 + $7900= $210,400
Common stock =4,500 x $5=$22,500
Paid in capital in excess of par common stock = Cash - Common stock =$210,400-$22,500=$187,900
2) To reccord Land purchased in exchange of common stock
Account title Debit Credit
Land $50,600
Common stock $ 5,500
Paid in capital in excess of par $45,100
common stock
Calculation:
Land= 1,100 x $46 = $50,600
Common stock =1,100 x $5=$5,500
Paid in capital in excess of par common stock = 1100 x (46-5)$41=45,100
3) To record purchase of treasury stock
Account title Debit Credit
Treasury stock $19,270
Cash $19,270
Calculation:
Treasury stock = 470 shares x$41= $19,270
The following table reports real income per person for several different economies in the years 1960 and 2010. It also gives each economy's average annual growth rate during this period. For example, real income per person in Niger was $945 in 1960, and it actually declined to $570 by 2010. Niger's average annual growth rate during this period was -1.01%, and it was the poorest economy in the table in the year 2010. The real income-per-person figures are denominated in U.S. dollars with a base year of 2005. The following exercises will help you to understand the different growth experiences of these economies.
Economy Real Income per Person in 1960 Real Income per Person in 2010 Annual Growth Rate
(Dollars) (Dollars) (Percent)
Canada 12,946 35,810 2.06
United Kingdom 11,884 32,034 2.00
Korea 1,610 28,702 5.93
Hong Kong 4,518 44,070 4.66
Guatemala 1,985 3,859 1.34
Indicate which economy satisfies each of the following statements.
Statement Canada Guatemala Hong Kong Korea Niger United Kingdom
This economy had the highest level of real income per person in the year 2010.
This economy experienced the fastest rate of growth in real income per person from 1960 to 2010.
Consider the following list of four economies. Which economy began with a level of real income per person in 1960 that was well below that of the United Kingdom and grew fast enough to catch up with and surpass the United Kingdom's real income per person by 2010?
a. Canada
b. Guatemala
c. Hong Kong
d. Korea
The economy began with a level of real income per person in 1960 that was well below that of the United Kingdom and grew fast enough to catch up with and surpass the United Kingdom's real income per person by 2010 is Korea. Thus the correct option is D.
What is the Economy?The economy of any country is determined by the ratio of production and consumption that takes place within a year and evaluates the flow of funds in the market by analyzing the purchasing parity of an individual.
In the given report one can observe that the real income per person in the year 1960 in the United Kingdom was 11,884 with the Real Income per Person in 2010 being 32,034.
Based on the information from the table, it is concluded that Korea is the economy that grew fast enough to catch up with and surpass the United Kingdom's real income per person by 2010.
As of 1960, Korea has Real Income per Person was 1,610 which grew to 28,702 in 2010 showing quick development.
Therefore, option D is appropriate.
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Managers who establish effective goals can enhance the performance of their employees and of their company. The manager in the scenario presented next realizes that goals are essential to improving performance. Goal setting helps motivate employees by clarifying their roles at work and establishing performance objectives. Effective goal setting is more than just asking employees to do their best or to try harder. It requires attention to key goal characteristics that increase intensity and persistence, and ultimately improve performance. The goal of this exercise is to demonstrate your understanding of goal setting by matching each employee’s goal with his or her goal characteristic. Match each employee’s goal with his or her goal characteristic.
1. Achievable Goals
2. Measurable Goals
3. Relevant Goals
4. Time-Frame Goals
5. Specific Goals
6. Reviewed Goals
Match each of the options above to the items below.
Carlos’ goal is to reduce average loan processing by fifteen percent within the next 6 months.
Michelle is a salesperson. Her goal is to increase the number of sales calls made to potential customers.
Sam has been reviewing customer accounts at a rate of two per day. His goal is to double that rate. That is possible, but he’ll have to work hard and be creative to reach this goal.
Chen has been given a project, and his manager clearly communicated the quantity and quality expectations to him.
Elizabeth has just been given a project which needs to be completed within 6 weeks.
Kelly is most excited about adopting goals because it means she’ll finally have a clear measure of how well she is doing.
Answer: See explanation
Explanation:
a. Carlos’ goal is to reduce average loan processing by fifteen percent within the next 6 months. - Reviewed goal.
Reviewed goals has to do with the goals set by an individual when the individual takes into consideration the previously set goals and he or she reviews them. This is used by Carlos as he takes into consideration his previous average loan processing.
b. Michelle is a salesperson. Her goal is to increase the number of sales calls made to potential customers. - Relevant goal.
Relevant goal simply means that the goal must be realistic and also reasonable. In this scenario, Michelle wants to increase the number of calls regarding sales made to customers. This is reasonable.
c. Sam has been reviewing customer accounts at a rate of two per day. His goal is to double that rate. That is possible, but he’ll have to work hard and be creative to reach this goal. - Achievable goals.
Achievable goal simply means a goal that it's possible for an individual to achieve and it's attainable.
d. Chen has been given a project, and his manager clearly communicated the quantity and quality expectations to him. - Specific goals
A specific goal is a goal that is well defined and also clear. This can be seen in the above example.
e. Elizabeth has just been given a project which needs to be completed within 6 weeks. - Time frame goal.
Time frame goal is a goal that has a deadline and is expected to be finished within a set date. In this scenario, Elizabeth has six weeks to complete the said project.
f. Kelly is most excited about adopting goals because it means she’ll finally have a clear measure of how well she is doing. - Measurable goal.
A measurable goal is a goal that one tracks his or her progress as one continues the project. Kelly has a clear measure of how well she's doing. This is a measurable goal.
At December 31, 2013, Weiss Imports reported this information on its balance sheet.
Accounts receivable $600,000
Less: Allowance for doubtful accounts 37,000
During 2014, the company had the following transactions related to receivables.
1. Sales on account $2,500,000
2. Sales returns and allowances 50,000
3. Collections of accounts receivable 2,200,000
4. Write-offs of accounts receivable deemed uncollectible 41,000
5. Recovery of bad debts previously written off as uncollectible 15,000
To do;
1. Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
2. Enter the January 1, 2014, balances in Accounts Receivable and Allowance for Doubtful Accounts, post the entries to the two accounts and determine the balances. (Post entries in the order of journal entries posted in the previous part)
3. Prepare the journal entry to record bad debt expense for 2014, assuming that aging the accounts receivable indicates that estimated bad debts are $46,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
4. Compute the accounts receivable turnover. (Round answer to 1 decimal place, e.g. 12.5.)
Accounts receivable turnover
Image for At December 31, 2013, Weiss Imports reported this information on its balance sheet. During 2014, the company
times
Compute the average collection period. (Round answer to 1 decimal place, e.g. 12.5.)
Average collection period
Image for At December 31, 2013, Weiss Imports reported this information on its balance sheet. During 2014, the company
days
Answer:
account receivables 2,500,000 debit
sales revenue 2,500,000 credit
--to record sales on account--
sales returns and allowances 50,000 debit
account receivables 50,000 credit
--to record return and allowances--
cash 2,200,000 debit
account receivables 2,200,000 credit
--to record collections--
Allowance for doubtful accounts 41,000 debit
Account receivables 41,000 credit
--to record write-off of receivables--
Account receivables 15,000 credit
Allowance for doubtful accounts 15,000 debit
cash 15,000 debit
account receivables 15,000 credit
--to record recovery of write-off account--
Balance:
Account Receivalbes 809,000
Allowance (before adjustment) 11,000
adjusting entry:
bad debt expense 35,000 debit
Allowance for doubtful accounts 35,000 credit
Allowance after adjustment: 46,000
Account receivables TO: 3.75
Explanation:
Account Receivables:
DEBIT CREDIT
600,000
2,500,000
50,000
2,200,000
41,000
15,000
809,000
Allowance:
DEBIT CREDIT
37,000
41,000
15,000
11,000
Aging: 46,000
Adjustment 35,000
Acc Rec TO
[tex]$$ net sales / net receivables \\\\(sales - returns) / (acc rec - allowance)[/tex]
beginning A/R 600,000 - 37,000 = 543,000
ending A/R 809,000 - 46,000 = 763,000
average: (763,000 + 543,000 ) / 2 = 653,000
(2,500,000 - 50,000) / 653,000 = 3,75191 = 3.75
Suppose you receive at the end of each year for the next three years. a. If the interest rate is , what is the present value of these cash flows? b. What is the future value in three years of the present value you computed in (a)? c. Suppose you deposit the cash flows in a bank account that pays interest per year. What is the balance in the account at the end of each of the next three years (after your deposit is made)? How does the final bank balance compare with your answer in (b)?
Answer:
the question is missing the numbers, so I looked for a similar question:
Suppose you receive $100 at the end of each year for the next three years. a. If the interest rate is 8%, what is the present value of these cash flows? (Answer: $257) b. What is the future value in three years of the present value you computed in (a)? (Answer: $324.61) c. Suppose you deposit the cash flows in a bank account that pays 8% interest per year. What is the balance in the account at the end of each of the next three years (after your deposit is made)? How does the final bank balance compare with your answer in (b)?
a) PV = $100/1.08 + $100/1.08² + $100/1.08³ = $257.71
b) FV = $257.71 x (1 + 8%)³ = $324.64
c) FV = ($100 x 1.08²) + ($100 x 1.08) + $100 = $324.64
it is exactly the same as the answer for (b)
Determine the selling price PV, per $1,000 maturity value, of the bond. HINT [See Example 8.] (Assume twice-yearly interest payments. Do not round those payments to the nearest cent. Round your selling price PV to the nearest cent.) 20-year, 4.225% bond, with a yield of 4.23%
Answer:
$999.60
Explanation:
For computing the selling price i.e. present value we have to use the present value function i.e. shown below:
Given that
NPER = 20 × 2 = 40
PMT = $1,000 × 4.225% ÷ 2 = $21.125
RATE = 4.23% ÷ 2 = 2.115%
FV = $1,000
the formula is shown below:
PV =-PV(RATE;NPER;PMTFV;TYPE)
After applying the above formula, the present value is $999.60
Major League Bat Company manufactures baseball bats. In addition to its work in process inventories, the company maintains inventories of raw materials and finished goods. It uses raw materials as direct materials in production and as indirect materials. Its factory payroll costs include direct labor for production and indirect labor. All materials are added at the beginning of the process, and conversion costs are applied uniformly throughout the production process. Required: You are to maintain records and produce measures of inventories to reflect the July events of this company. The June 30 balances: Raw Materials Inventory, $22,000; Work in Process Inventory, $9,690 ($2,810 of direct materials and $6,880 of conversion); Finished Goods Inventory, $140,000; Sales, $0; Cost of Goods Sold, $0; Factory Payroll Payable, $0; and Factory Overhead, $0. 1. Prepare journal entries to record the following July transactions and events. Purchased raw materials for $130,000 cash (the company uses a perpetual inventory system). Used raw materials as follows: direct materials, $52,540; and indirect materials, $11,500. Recorded factory payroll payable costs as follows: direct labor, $206,000; and indirect labor, $26,500. Paid factory payroll cost of $232,500 with cash (ignore taxes). Incurred additional factory overhead costs of $83,000 paid in cash. Allocated factory overhead to production at 50% of direct labor costs. 2. Information about the July inventories follows. Use this information with that from part 1 to prepare a process cost summary, assuming the weighted-average method is used. (Round "Cost per EUP" to 2 decimal places.) Units Beginning inventory 6,500 units Started 14,000 units Ending inventory 8,000 units Beginning inventory Materials—Percent complete 100 % Conversion—Percent complete 80 % Ending inventory Materials—Percent complete 100 % Conversion—Percent complete 30 % 3.
Using the results from part 2 and the available information, make computations and prepare journal entries to record the following: Total costs transferred to finished goods for July. Sale of finished goods costing $273,200 for $640,000 in cash.Using the results from part 2 and the available information, make computations and prepare journal entries to record the following: Total costs transferred to finished goods for July. Sale of finished goods costing $273,200 for $640,000 in cash. Using the results from part 2 and the available information, make computations and prepare journal entries to record the following: Total costs transferred to finished goods for July. Sale of finished goods costing $273,200 for $640,000 in cash.
Answer:
Major League Bat Company
1. Journal Entries:
a. Debit Raw Materials Inventory $130,000
Credit Cash Account $130,000
To record the purchase of raw materials.
b. Debit Work in Process $52,540
Debit Manufacturing Overhead $11,500
Credit Raw Materials $64,040
To record materials used.
c. Debit Factory Wages $232,500
Credit Cash Account $232,500
To record factory payroll paid in cash.
d. Debit Work in Process $206,000
Debit Manufacturing Overhead $26,500
Credit Factory Wages $232,500
To record factory payroll costs.
e. Debit Manufacturing Overhead $83,000
Credit Cash Account $83,000
To record additional factory overhead costs.
f. Debit Work In Process $103,000
Credit Manufacturing Overhead $103,000
To allocate factory overhead to production at 50% of direct labor costs.
2. Computation of Equivalent Units of Production:
Materials Conversion Total
Beginning inventory 6,500 units 6,500 5,200
Started 14,000 units 14,000 14,000
Ending inventory 8,000 units 8,000 2,400
Total equivalent unit 22,000 16,400
3. Costs of Production:
Beginning Inventory $2,810 $6,880
Raw materials 52,540 309,000
Total costs $55,350 $315,880
Total equivalent unit 22,000 16,400
Cost per equivalent unit $2.52 $19.26
Total costs:
Started 14,000 $35,280 14,000 $269,640 $304,920
Ending inventory 8,000 20,160 2,400 46,224 $66,384
Total 22,000 $55,440 16,400 $315,864 $371,304
4. Journal Entries:
Debit Finished Goods Inventory $304,920
Credit Work In Process $ 304,920
To record the transfer of goods.
Debit Cost of Goods Sold $273,200
Credit Finished Goods Inventory $273,200
To record the cost of goods sold.
Debit Cash Account $640,000
Credit Sales Revenue $640,000
To record the sale of goods for cash.
5. Ledger accounts:
Raw Materials Inventory
Accounts Titles Debit Credit
Balance $22,000
Cash Account 130,000
Work in Process $52,540
Manufacturing Overhead 11,500
Work In Process
Accounts Titles Debit Credit
Balance $9,690
Raw materials 52,540
Factory Wages 206,000
Manufacturing
Overhead 103,000
Finished Goods Inventory $ 304,920
Balance 66,384
Manufacturing Overhead
Accounts Titles Debit Credit
Raw materials $11,500
Factory wages 26,500
Other overheads 83,000
Work in Process applied $103,000
Underapplied overhead 18,000
6. Income Statement:
For July
Sales Revenue $640,000
Cost of goods sold 273,200
Underapplied overhead 18,000 $291,200
Gross profit $348,800
Explanation:
a) Data and Calculations:
June 30 Balances:
Raw Materials Inventory, $22,000;
Work in Process Inventory, $9,690 ($2,810 of direct materials and $6,880 of conversion);
Finished Goods Inventory, $140,000;
Sales, $0;
Cost of Goods Sold, $0;
Factory Payroll Payable, $0; and
Factory Overhead, $0. 1.
Megan McCoy has a Bachelor's degree in business management and human resources. She has 5 years of HR experience as an HR assistant with her current employer. Megan thinks that with her education and experience, she is qualified for the position of HR manager. After observing her own boss, she feels confident that she could do that job. However, Megan knows that she does not see everything that her boss does, and may not be aware of all the tasks, duties, and responsibilities (TDRs) of the job, and the knowledge, skills, abilities, and other characteristics (KSAOs) necessary to do the job. To get more information about the occupation of an HR Manager, Megan did some research using the Occupational Information Network.
The general description of the job of HR manager includes
a. supervising and coordinating the activities of clerical and administrative support workers.
b. maintaining record of assets, liabilities, tax liability, and other financial activities.
c. maintaining functions such as employee compensation, recruitment, and personnel policies.
d. interacting with customers and handling and resolving customer complaints.
e. providing high-level administrative support by conducting research and preparing reports.
Answer:
c. maintaining functions such as employee compensation, recruitment, and personnel policies.
Explanation:
The human resources department in a company is increasingly important, since HR is the area where the company's human capital is managed, and more and more people must be valued in an organization, which currently assume the role promoters of human development both internally and externally.
The general job description of the HR manager includes maintaining roles such as employee compensation, recruitment and personnel policies.
To be an effective manager, there must be an understanding that employees have specific needs that must be met in the company, there must be policies that protect and value the employee according to the law, as well as the establishment of positions and fair remuneration and consistent with the function performed, preparation of training and development, etc.
Organizations are composed of people, therefore they are not rigid entities, it is necessary that the manager has flexibility to deal with people and their demands, always seeking to build positive professional relationships that contribute to an organizational culture favorable to the development of the skills and competences of the people.
In early 2016, the same Germany machinery company has interest from four prospective clients from emerging markets: Indonesia, Brazil, Russia, and South Africa. They all want to buy ten machines, but the factory can only produce ten in time. Therefore, the company has to choose only one client. Given the volatility of the domestic currencies of the four prospective clients, the CFO would like to choose the client which is least likely to cancel the order due to currency volatility. The invoice comes due on June 30, 2016. According to volatility alone, which prospective client would be most likely to cancel the order?
Answer:
Brazil
Explanation:
According to the picture below, Brazilian real is the currency that has the lowers currency volatility, its spot is 4.0685, and its forward is 4.1820. These values are way lower than the values of the other three currencies, and for this reason, the CFO should choose the Brazilian client, clearly.
Indonesia is the country that is most likely to cancel this order. This is due to its high volatility.
Following the volatility chart that is attached to this question we can clearly spot that Indonesia has the most likelihood to cancel the order.
The volatility of the currency of the country Indonesia is shown to be high and this high volatility is very much going to have an impact on trade.
When there is a weakness in the currency of a nation, the cost of import would go up.
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On September 1, 2018, Evansville Lumber Company issued $80 million in 20-year, 10 percent bonds payable. Interest is payable semiannually on March 1 and September 1. Bond discounts and premiums are amortized at each interest payment date and at year-end. g The company’s fiscal year ends at December 31.
Required:
A-1. Prepare the necessary adjusting entries at December 31, 2018, and the journal entry to record the payment of bond interest on March 1, 2019, under the assumption that the bonds were issued at 98.
A-2. Prepare the necessary adjusting entries at December 31, 2018, and the journal entry to record the payment of bond interest on March 1, 2019, under the assumption that the bonds were issued at 101.
B. Compute the net bond liability at December 31, 2019, under assumptions A-1 and A-2 above.
C. Under which of these assumptions, 1 or 2, would the investor's effective rate of interest be higher? Explain.
Answer:
A-1
interest payable 2,693,334 debit
Interest payable 2,666,667 credit
discount on bond payable 26,667 credit
--to record Dec 31st adjusting entry--
interest expense 1,346,666 debit
interest payable 2,666,667 debit
discount on bond payable 13,333 credit
cash 4,000,000 credit
--to record March 1st Payment
A-2
interest expense 2,653,334 debit
premium on bond payable 13,333 debit
Interest payable 2,666,667 credit
--to record Dec 31st adjusting entry--
interest expense 1.326.666 debit
interest payable 2,666,667 debit
premium on bond payable 6,667 debit
cash 4,000,000 credit
--to record March 1st Payment
B)
A-1
78,400,000 + 26,667 = 78,426,667
A-2
80,800,000 - 13,333 = 80,786,667
C)
the effective interest rate is higher under A-1 as the company is paying the same nominal amount of $4,000,000 every six months but, received less cash for the bonds in A-1 case making the effective rate higher .
Explanation:
A-1 issued at 98 points
cash received:
80,000,000 x 98/100 = 78,400,000
discount on bonds: 80,000,000 - 78,400,000 = 1,600,000
On Dec 31st we solve for accrued discoutn and interest:
amortization
1,600,000 / 40 payment = 40,000 per payment
proportional amortization: 40,000 x 4/6 (month accrued) = 26,667
interest paid
principal x rate x time
80,000,000 x 10% x 4/12 = 2,666,667
payment:
8,000,000 x 10% x 6/12 = 4,000,000
proportional amortization: 40,000 x 2/6 (month accrued) = 13,333
accrued interest 8,000,000 x 10% x 2/12 = 1,333,333
A-2 we issue a 101 point
cash received:
80,000,000 x 101/100 = 80,800,000
premuim on bonds: 800,000
On Dec 31st we solve for accrued discount and interest:
amortization
800,000 / 40 payment = 20,000 per payment
proportional amortization: 20,000 x 4/6 (month accrued) = 13,333
interest paid
principal x rate x time
80,000,000 x 10% x 4/12 = 2,666,667
payment:
8,000,000 x 10% x 6/12 = 4,000,000
proportional amortization: 40,000 x 2/6 (month accrued) = 6,667
accrued interest 8,000,000 x 10% x 2/12 = 1,333,333
The lowest amount a manufacturer can pay factory workers is an example of
an incentive.
a price floor.
a price ceiling.
an elastic service.
Answer:
The answer to this question is given below in the explanation section.
Explanation:
The correct answer to this question is the price floor.
The Price floor is the lowest amount that is imposed by the government or group-imposed lowest price limit for a product or service. The government uses the price floor to keep prices at a certain level from going to low. So price floors for workers set by the government that the employer should not pay less than the set amount.
while other options are not correct because::
The price ceiling is the high amount set by the government or the by other groups for a product or service.
An incentive is an amount or something that can be given to employees or someone for motivation or encouraging them to do something.
An elastic service is given by amazon to develop and run the application with different tools etc.
Answer:price floor
Explanation:
Joni Metlock Inc. has the following amounts reported in its general ledger at the end of the current year.
Organization costs $22,300
Trademarks 12,700
Discount on bonds payable 35,300
Deposits with advertising
agency for ads to promote
goodwill of company 10,300
Excess of cost over fair
value of net identifiable
assets of acquired subsidiary 75,300
Cost of equipment acquired for
research and development projects;
the equipment has an alternative future use 85,300
Costs of developing a secret formula for a
product that is expected to be marketed for
at least 20 years 79,600
On the basis of this information, compute the total amount to be reported by Metlock for intangible assets on its balance sheet at year-end.
Answer:
Joni Metlock Inc.
Computation of the total amount of Intangible Assets on the Balance Sheet at year-end:
Organization costs $22,300
Trademarks 12,700
Goodwill acquired 75,300
Secret formula Development cost 79,600
Total amount of intangibles $189,900
Explanation:
Data:
Organization costs $22,300
Trademarks 12,700
Discount on bonds payable 35,300
Deposits with advertising
agency for ads to promote
goodwill of company 10,300
Excess of cost over fair
value of net identifiable
assets of acquired subsidiary 75,300
Cost of equipment acquired for
research and development projects;
the equipment has an alternative future use 85,300
Costs of developing a secret formula for a
product that is expected to be marketed for
at least 20 years 79,600
b) Metlock's intangible assets are the non-physical assets like Goodwill, brand recognition and intellectual property, such as patents, trademarks, and copyrights.
The transactions of Spade Company:
a. Kacy Spade, owner, invested $16,750 cash in the company in exchange for common stock.
b. The company purchased office supplies for $486 cash.
c. The company purchased $9,263 of office equipment on credit.
d. The company received $1,977 cash as fees for services provided to a customer.
e. The company paid $9,263 cash to settle the payable for the office equipment purchased in transaction c.
f. The company billed a customer $3,551 as fees for services provided.
g. The company paid $520 cash for the monthly rent.
h. The company collected $1,491 cash as partial payment for the account receivable created in transaction f.
g. The company paid a $800 cash dividend to the owner (sole shareholder).
Required:
Prepare the Trial Balance. Use May 31 as its report date.
Answer:
Please see attached trial balance as requested.
Explanation:
Please find attached solved trial balance for Spade Company as at May 31.
Fields Company has two manufacturing departments, forming and painting. The company uses the weighted-average method of process costing. At the beginning of the month, the forming department has 36,000 units in inventory, 70% complete as to materials and 30% complete as to conversion costs. The beginning inventory cost of $82,100 consisted of $58,000 of direct materials costs and $24,100 of conversion costs.
During the month, the forming department started 520,000 units. At the end of the month, the forming department had 40,000 units in ending inventory, 85% complete as to materials and 35% complete as to conversion. Units completed in the forming department are transferred to the painting department. Cost information for the forming department is as follows:
Beginning work in process inventory $82,100
Direct materials added during the month 1,942,930
Conversion added during the month 1,359,730
1A. Calculate the equivalent units of production for the forming department.
1B. Calculate the costs per equivalent unit of production for the forming department.
1C. Using the weighted-average method, assign costs to the forming department’s output—specifically, its units transferred to painting and its ending work in process inventory.
Answer:
Please see attached detailed solution
Explanation:
1a. Direct material 550,000
Conversion 530,000
1b. Direct materials $3.64 per EUP
Conversion $2.61 per EUP
1c. Costs assigned to the forming department's output
• Total cost of ending work in process $160,300
• Total costs assigned $3,384,760
Please see attached detailed solution to the above questions and answers.
You are invested in two hedge funds. The probability that hedge fund Alpha generates positive returns in any given year is 60%. The probability that hedge fund Omega generates positive returns in any given year is 70%. Assume the returns are independent. What is the probability that both funds generate positive returns in a given year? What is the probability that both funds lose money?
Answer:
42% and 12%
Explanation:
The computation is shown below:
For Alpha Fund
Positive return = 60%
Lose money is
= 1 - 0.60
= 40%
For Omega Fund
Positive return = 70%
Lose money is
= 1 - 0.70
= 0.30
Also the returns are non-dependent
Now the positive return is
= 60% × 70
= 42%
And, the probability of lose money is
= 40% × 30%
= 12%
On September 1, Boylan Office Supply had an inventory of 30 calculators at a cost of $18 each. The company uses a perpetual inventory system. During September, the following transactions occurred.
Sept. 6 Purchased with cash 80 calculators at $20 each from Guthrie Co.
Sept. 9 Paid freight of $80 on calculators purchased from Guthrie Co.
Sept. 10 Returned 3 calculators to Guthrie Co. for $63 cash (including freight) because they did not meet specifications.
Sept. 12 Sold 26 calculators costing $21 (including freight) for $31 each on account to Lee Book Store, terms n/30.
Sept. 14 Granted credit of $31 to Lee Book Store for the return of one calculator that was not ordered.
Sept. 20 Sold 30 calculators costing $21 for $32 each on account to Orr's Card Shop, terms n/30.
Journalize the September transactions.
Answer:
Sept 6. DR Inventory (80 * 20) 1,600
CR Accounts Payable $1,600
Sept 9. DR Inventory 80
CR Cash 80
Sept 10. DR Accounts Payable 63
CR Inventory 63
Sept 12. DR Accounts Receivable (26 * 31) 806
CR Sales Revenue 806
DR Cost of Goods Sold (21 * 26) 546
CR Inventory 546
Sept 14. DR Sales Returns and Allowances 31
CR Accounts Receivable 31
DR Inventory 21
CR Cost of Goods Sold 21
Sept. 20 DR Accounts Receivable (30 * 32) 960
CR Sales Revenue 960
DR Cost of Goods Sold (30 * 21) 630
CR Inventory 630
Hart Attorney at Law experienced the follwoing transactions in 2016, the first year of operations:
1. Accepted $36,000 on 4/1/16, as a retainer for services to be performed evenly over the next 12 months.
2. Performed legal services for cash of $54,000.
3. Purchased $2,800 of office suppies on account.
4. Paid $2,400 of the amount due on accounts payable.
5. Paid a cahs dividend to the stockholders of $5,000.
6. Paid cash for operationg expenses of $31,000.
7. Determined that at the end of the accounting period $200 of office supplies remained on hand.
8. On 12/31/16, recognized the revenue that had been earned for services performed in accordance with Transaction 1
Required:
Show the effects of the events on the fianncial statements using a horizontal statement model.
Answer:
I used an excel spreadsheet since there is not enough room here.
Explanation:
In its first year of business, Borden Corporation had sales of $2,020,000 and cost of goods sold of $1,210,000. Borden expects returns in the following year to equal 6% of sales. The adjusting entry or entries to record the expected sales returns is (are):
Answer: Please see answers in explanation column
Explanation:
Accounts title and explanation Debit Credit
Sales returns and allowances $121,200
Sales refund payable $121,200
Calculation
Expected Sales returns and allowances = sales x expected percentage
= 2,020,000 x 6%= $121,200
Accounts title and explanation Debit Credit
Inventory returns estimated $72,600
Cost of goods sold $72,600
Calculation
expected Cost of goods sold = Cost of goods soldx expected percentage
= 1,210,000 x6%=$72,600
Your classmates from the University of Chicago are planning to go to Miami for spring break, and you are undecided about whether you should go with them. The round-trip airfare is $600, but you have a frequent-flyer coupon worth $500 that you could use to pay part of the airfare. All other costs for the vacation are exactly $900. The most you would be willing to pay for the trip is $1,400. Your only alternative use for your frequent-flyer coupon is for your trip to Atlanta two weeks after the break to attend your sister's graduation, which your parents are forcing you to attend. The Chicago-Atlanta round-trip airfare is $450. If the Chicago-Atlanta round-trip air fare were $350, should you use the coupon to go to Miami?
Answer:
You should use the discount coupon to pay for the Chicago-Miami trip. Not considering the personal motivations for the trip, the coupon is worth $500. The cost of flying is $600, so you will only pay $100 yourself. You will be spending $900 + $1000 = $1,000 in total.
The opportunity cost of using the coupon is $350 (the cost of the round trip to Atlanta). Even if you add the $350 to the $1,000 expense, the total is $1,350, less than your $1,400 maximum budget.
today ,I am happy I help my grandma
Environmental recovery company RexChem Part- ners plans to finance a site reclamation project that will require a 4-year cleanup period. The company plans to borrow $1.8 million now. How much will the company reveice in annual paymebts
Complete question Text:
Environmental recovery company RexChem Partners plans to finance a site reclamation project that will require a 4-year cleanup period. The company will borrow $1.8 million now to finance the project. How much will the company have to receive in annual payments for 4 years, provided it will also receive a final lump sum payment after 4 years in the amount of $800,000? The MARR is 10% per year on its investment
Answer:
We are going to receive annual payment of $395,471
Explanation:
We solve for the present value of the lump-sum today:
PRESENT VALUE OF LUMP SUM
[tex]\frac{Maturity}{(1 + rate)^{time} } = PV[/tex]
Maturity 800,000.00
time 4.00
rate 0.1
[tex]\frac{800000}{(1 + 0.1)^{4} } = PV[/tex]
PV 546,410.76
Now, we deduct this fromthe 1,800,000 loan:
1,800,000 - 546,410.76 = 1,253,589.24
this value will be the amount the yearly installment will ghave to pay.
Installment of a present annuity
[tex]PV \div \frac{1-(1+r)^{-time} }{rate} = C\\[/tex]
PV 1,253,589.24 €
time 4
rate 0.1
[tex]1253589.24 \div \frac{1-(1+0.1)^{-4} }{0.1} = C\\[/tex]
C $ 395,470.805
The Aleutian Company uses departmental overhead rates. The Fabrication Department uses machine hours for an allocation base, and the Assembly Department uses labor hours. What is the Assembly Department overhead rate per labor hour
Answer:
$4.425 per labor hour
Explanation:
Note: The full question has been attached as picture
Product Rings Labor Hours = 1030 units x 4 labor hours per unit
Product Rings Labor Hours = 4,120 hours
Product Dings Labor Hours = 1810 units x 7 Labor hour per unit
Product Dings Labor Hours = 12,670 hours
Hence, the total Labor Hours = 4,120 hours + 12,670 hours = 16,790 hours
The total Assembly Department Overhead is estimated to be $74,300. Hence, the Assembly Department Overhead rate per labor hour = Total Overhead / Total Labor Hours
Assembly Department Overhead rate = $74,300 / 16,790
Assembly Department Overhead rate = $4.425
Brett, the manager at Warson’s Diner, plans to promote Keisha, one of the waitresses, to the position of an assistant manager. However, the owner, being racially biased, prevents him from doing so. Later, when Brett wants to promote one of the delivery boys to waiter, the owner again vetoes his recommendation on the grounds that his customers would feel uncomfortable having a black man deliver their food. Brett, extremely frustrated, offers Keisha and the delivery boy their promotions as he finds them deserving. Subsequently, Brett gets fired. Which of the following holds true in this scenario?
a. Brett has a cause of action against Warson’s Diner for retaliatory discharge under Title VII of the Civil Rights Act of 1964.
b. Brett has a cause of action against Warson’s Diner based on the bona fide occupational qualification defense.
c. Brett is liable for racial discrimination because as a manager he failed to change the company’s policy regarding promotion of African-Americans.
d. Brett is liable because he failed to follow the instructions provided by his employer.
Answer:
a)Brett has a cause of action against Warson's Diner for retaliatory discharge under Title VII of the Civil Rights Act of 1964.
Explanation:
From the question, we are informed about Brett, the manager at Warson’s Diner, who plans to promote Keisha, one of the waitresses, to the position of an assistant manager. We are also told that the owner, being racially biased, prevents him from doing so and in the end , Brett gets fired
What holds true in this scenario described above is that Brett has a cause of action against Warson's Diner for retaliatory discharge under Title VII of the Civil Rights Act of 1964.
Title VII of the Civil Rights Act of 1964. Is a law, of Act of 1964 that oversee any form of discrimination against employee of an organization and shield them from been discriminated because of race they belong to, their sex , their National origin an so on . The law doesn't only forbid discrimination that is intentional, but all actions that speak discrimination wether intentional or not.
According to the video, what are some things that Human Resources Managers do? Check all that apply.
oversee hiring and firing
purchase computers
distribute office supplies
develop training programs
develop personnel policies
develop pricing strategies
develop recruiting programs
Answer:
1 4 5 7
Explaination:
Answer:
1 4 5 7
Explanation:
How is an index fund different than an exchange-traded fund?
Answer:The key differences between index ETFs and index funds is ETFs trade throughout the day while index funds trade once at market close. ETFs are often cheaper than index funds if bought commission-free. Index funds often have higher minimum investments than ETFs.
Explanation: The key differences between index ETFs and index funds is ETFs trade throughout the day while index funds trade once at market close. ETFs are often cheaper than index funds if bought commission-free. Index funds often have higher minimum investments than ETFs.
Following are several figures reported for Allister and Barone as of December 31, 2015:
Allister Barone
Inventory $50,000 $300,000
Sales 1,000,000 8,00,000
Investment income Not given
Cost of goods sold 500,000 400,000
Operating expenses 230,000 300,000
Allister acquired 90 percent of Barone in January 2020. In allocating the newly acquired subsidiary's fair value at the acquisition date, Allister noted that Barone had developed a customer list worth $66,000 that was unrecorded on its accounting records and had a six-year remaining life. Any remaining excess fair value over Barone's book value was attributed to goodwill. During 2021, Barone sells inventory costing $135,000 to Allister for $190,000. Of this amount, 20 percent remains unsold in Allister's warehouse at year-end.
Determine balances for the following items that would appear on Allister's consolidated financial statements for 2015:
a. Inventory
b. Sales
c. Cost of Goods Sold
d. Operating Expenses
e. Net Income Attributable to Non-controlling Interest
Answer:
a. $344,500
b. $1,610,000
c. $405,500
d. $530,000
e. $9,550 loss
Explanation:
First, Eliminate the Intragroup transactions as follows :
Elimination Journal for the Intragroup Sale :
Sales (Barone) $190,000 (debit)
Cost of Sales (Allister) $190,000 (credit)
Elimination of unrealized profit in closing inventory :
Cost of Sales (Barone) $5,500 (debit)
Inventory (Allister) $5,500 (credit)
Unrealized Profit in Inventory ($190,000 - $135,000) × 10% = $5,500
Then, Consolidate the Financial Statements taking into account the elimination journals
Note : Consolidation is 100% of Parent + 100% of Subsidiary.
Note : A firm that is exercising control (> 50% Voting Rights) is required to prepare Consolidated Financial Statements - IFRS 3.
Consolidated Income Statement
Sales (1,000,000 + 8,00,000 - $190,000) $1,610,000
Cost of Sales ( $500,000 + 400,000 - $190,000 + $5,500) ($715,500)
Gross Profit $894,500
Less Operating Expenses ($230,000 + $300,000) ($530,000)
Net Income $364,500
Consolidated Financial Statement (Extract)
Inventory ($50,000 + $300,000 - $5,500) $344,500
Subsidiary Profit
Net Income Attributable to Non-controlling Interest
Net Income Attributable to Non-controlling Interest = Net Subsidiary Income × % Non Controlling Interest
Net Subsidiary Income - Barone
Sales (800,000 - 190,000) $610,000
Less Cost of Sales ( 400,000 + 5,500) ($405,500)
Gross Profit $204,500
Less Operating Expenses ($300,000)
Net Income/ (loss) ($95,500)
Therefore,
Net Income Attributable to Non-controlling Interest = ($95,500) × 10%
= $9,550 loss
How much would the Gerrards have to put down if the lender required a minimum 20 percent down payment
Answer:
the first part of the question is missing, so I looked for similar questions to fill in the blanks:
Ben and Marie Gerrard, both in their mid-20s, have been married for 4 years and have two preschool-age children. Ben has an accounting degree and is employed as a cost accountant at an annual salary of $63,000. They're now renting a duplex but wish to buy a home in the suburbs of their rapidly developing city. They've decided they can afford a $210,000 house and hope to find one with the features they desire in a good neighborhood.
If the Gerrards are required to make a minimum 20% down payment, then they need to pay at least $210,000 x 20% = $42,000.
Many lenders require a minimum down payment for a mortgage loan and others charge different interest rates depending on the down payment percentage, e.g. if your down payment represents 30% of the house's value, the interest rate will be lower than a loan with a 20% down payment. The logic behind this is that the higher the down payment, the safer the loan.
On December 31, 2021, the end of the fiscal year, California Microtech Corporation completed the sale of its semiconductor business for $15 million. The semiconductor business segment qualifies as a component of the entity according to GAAP. The book value of the assets of the segment was $13 million. The loss from operations of the segment during 2021 was $4.8 million. Pretax income from continuing operations for the year totaled $7.8 million. The income tax rate is 25%.
Prepare the lower portion of the 2021 income statement beginning with income from continuing operations before income taxes. Ignore EPS disclosures. (Amounts to be deducted and negative amounts should be indicated with a minus sign. Enter your answers in whole dollars and not in millions.)
Answer and Explanation:
The preparation of the lower portion is presented below:
Income from the continuing operation
before income tax $7,800,000
Less: Income tax expenses ($7,800,000 × 25%) (1,950,000)
Income from continuing operation(A) 5,850,000
Discontinued operation:
Loss from operation discontinued components
($15 - $13 - $4.8) ($2,800,000)
Income tax benefits ($2,800,000 × 25%) $700,000
Loss on discontinued operation(B) ($21,000,000)
Net loss (A - B) -$15,150,000
Leach Inc. experienced the following events for the first two years of its operations:
Year 1:
Issued $10,000 of common stock for cash.
Provided $78,000 of services on account.
Provided $36,000 of services and received cash.
Collected $69,000 cash from accounts receivable.
Paid $38,000 of salaries expense for the year.
Adjusted the accounting records to reflect uncollectible accounts expense for the year.
Leach estimates that 5 percent of the ending accounts receivable balance will be uncollectible.
Closed the revenue account. Closed the expense account.
Year 2:
Wrote off an uncollectible account for $650.
Provided $88,000 of services on account.
Provided $32,000 of services and collected cash.
Collected $81,000 cash from accounts receivable.
Paid $65,000 of salaries expense for the year.
Adjusted the accounts to reflect uncollectible accounts expense for the year.
Leach estimates that 5 percent of the ending accounts receivable balance will be uncollectible.
Required
a. Record the Year 1 and Year 2 events in general journal form and post them to T-accounts.
b. Prepare the income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows for Year 1 and Year 2.
c. What is the net realizable value of the accounts receivable at Year 1 and Year 2?
Answer:
a.1) year 1
Issued $10,000 of common stock for cash.
Dr cash 10,000
Cr common stock 10,000
Provided $78,000 of services on account.
Dr accounts receivable 78,000
Cr service revenue 78,000
Provided $36,000 of services and received cash.
Dr cash 36,000
Cr service revenue 36,000
Collected $69,000 cash from accounts receivable.
Dr cash 69,000
Cr accounts receivable 69,000
Paid $38,000 of salaries expense for the year.
Dr wages expense 38,000
Cr cash 38,000
Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 5 percent of the ending accounts receivable balance will be uncollectible.
Dr bad debt expense 450
Cr accounts receivable 450
Closed the revenue account. Closed the expense account.
Dr service revenue 114,000
Cr income summary 114,000
Dr income summary 38,450
Cr wages expense 38,000
Cr bad debt expense 450
Dr income summary 75,550
Cr retained earnings 75,550
b.1) income statement year 1Service revenue $114,000
Expenses:
Wages $38,000Bad debt $450 ($38,450)Net income $75,550
balance sheet year 1Assets:
Cash $77,000
Accounts receivable $8,550
total assets $85,550
Equity:
Common stock $10,000
Retained earnings $75,550
total equity $85,550
statement of cash flows year 1Cash flows form operating activities:
Net income $75,550
adjustments:
Increase in accounts receivable ($8,550)
net cash from operating activities $67,000
Cash flow from financing activities:
Common stocks issued $10,000
Net cash increase $77,000
beginning cash balance $0
Ending cash balance $87,000
a.2) Year 2:
Wrote off an uncollectible account for $650.
Dr bad debt expense 650
Cr accounts receivable 650
Provided $88,000 of services on account.
Dr accounts receivable 88,000
Cr service revenue 88,000
Provided $32,000 of services and collected cash.
Dr cash 32,000
Cr service revenue 32,000
Collected $81,000 cash from accounts receivable.
Dr cash 81,000
Cr accounts receivable 81,000
Paid $65,000 of salaries expense for the year.
Dr wages expense 65,000
Cr cash 65,000
Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 5 percent of the ending accounts receivable balance will be uncollectible.
Dr bad debt expense 745
Cr accounts receivable 745
b.2) income statement year 2Service revenue $120,000
Expenses:
Wages $65,000Bad debt $1,395 ($38,450)Net income $53,605
balance sheet year 2Assets:
Cash $125,000
Accounts receivable $14,155
total assets $139,155
Equity:
Common stock $10,000
Retained earnings $129,155
total equity $139,155
statement of cash flows year 2Cash flows form operating activities:
Net income $53,605
adjustments:
Increase in accounts receivable ($5,605)
net cash from operating activities $48,000
Net cash increase $48,000
beginning cash balance $77,000
Ending cash balance $125,000
c) net realizable value of accounts receivable at year 1 = $8,550
net realizable value of accounts receivable at year 2 = $14,155
a. Recording the Year 1 and Year events in general journal form and posting to T-accounts for Leach Inc. are as follows:
General JournalYear 1:
Debit Cash $10,000
Credit Common stock $10,000
Debit Accounts Receivable $78,000
Credit Service Revenue $78,000
Debit Cash $36,000
Credit Service Revenue $36,000
Debit Cash $69,000
Credit Accounts Receivable $69,000
Debit Salaries Expense $38,000
Credit Cash $38,000
Adjustment:
Debit Bad Debts Expense $450
Credit Uncollectible Allowance $450
Year 2:
Debit Accounts Receivable $650
Credit Uncollectible Allowance $650
Debit Accounts Receivable $88,000
Credit Service Revenue $88,000
Debit Cash $32,000
Credit Service Revenue $32,000
Debit Cash $81,000
Credit Accounts Receivable $81,000
Debit Salaries Expense $65,000
Credit Cash $65,000
Adjustment:
Debit Bad Debts Expense $968
Credit Uncollectible Allowance $968
T-accounts:Year 1:
Cash AccountCommon stock $10,000
Service Revenue $36,000
Accounts Receivable $69,000
Salaries Expense $38,000
Balance $77,000
Uncollectible AllowanceBad debts Expense $450
Common Stock
Cash account $10,000
Accounts Receivable
Service Revenue $78,000
Cash $69,000
Balance $9,000
Service RevenueAccounts Receivable $78,000
Cash $36,000
Income Summary $114,000
Salaries ExpenseCash $38,000
Income Summary $38,000
Bad Debts Expense
Uncollectible Allowance $450
Income Summary $450
Year 2:
Cash AccountBalance $77,000
Service Revenue $32,000
Accounts Receivable $81,000
Salaries Expense $65,000
Balance $125,000
Uncollectible AllowanceBalance $450
Accounts Receivable $650
Bad debts expense $968
Balance $768
Common StockBalance $10,000
Accounts Receivable
Balance $9,000
Service Revenue $88,000
Uncollectible allowance $650
Cash $81,000
Balance $15,350
Service RevenueAccounts Receivable $88,000
Cash $32,000
Income Summary $120,000
Salaries ExpenseCash $65,000
Income Summary $65,000
Bad Debts Expense
Uncollectible Allowance $968
Income Summary $968
b. The preparation of the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Year 1 and Year 2 are as follows:
Leach Inc.
Income Statements for Year 1 and Year 2:Year 1 Year 2
Service Revenue $114,000 $120,000
Salaries Expense 38,000 $65,000
Bad Debts Expense 450 38,450 968 65,968
Net income $75,550 $54,032
Leach Inc.
Statements of Changes in Stockholders' Equity for Year 1 and Year 2:Year 1 Year 2
Beginning balance $10,000 $85,550
Net income 75,550 54,032
Ending balance $85,550 $139,582
Leach Inc.
Balance Sheets at Year 1 and Year 2:Year 1 Year 2
Assets:
Cash $77,000 $125,000
Accounts Receivable 9,000 15,350
Uncollectible Allowance (450) (768)
Total assets $85,550 $139,582
Equity:
Ending balance $85,550 $139,582
Leach Inc.
Statements of Cash Flows for Year 1 and 2:Operating Activities: Year 1 Year 2
Net income $75,550 $54,032
Changes in working capital:
Accounts receivable (8,550) (6,032)
Operating cash flows $67,000 $48,000
Financing Activities:
Common Stock $10,000 $0
Increase in cash flows $77,000 $48,000
c. The net realizable value of the accounts receivable at Year 1 is $8,550 ($9,000 - $450) and Year 2 is $14,582 ($15,350 - $768).
Data Analysis:Year 1:
Cash $10,000 Common stock $10,000
Accounts Receivable $78,000 Service Revenue $78,000
Cash $36,000 Service Revenue $36,000
Cash $69,000 Accounts Receivable $69,000
Salaries Expense $38,000 Cash $38,000
Adjustment:
Bad Debts Expense $450 Uncollectible Allowance $450
Year 2:
Uncollectible Allowance $650 Accounts Receivable $650
Accounts Receivable $88,000 Service Revenue $88,000
Cash $32,000 Service Revenue $32,000
Cash $81,000 Accounts Receivable $81,000
Salaries Expense $65,000 Cash $65,000
Adjustment:
Bad Debts Expense $968 Uncollectible Allowance $968
= $968 ($650 + $768 - $450)
$768 ($15,350 x 5%)
Learn more about preparing financial statements at https://brainly.com/question/735261
Cost of Goods Sold and Income Statement Schuch Company presents you with the following account balances taken from its December 31 adjusted trial balance:
Inventory, January 1 $40,000 Purchases returns $3,500
Selling expenses 35,000 Interest expense 4,000
Purchases 110,000 Sales discounts taken 2,000
Sales 280,000 Gain on sale of property (pretax) 7,000
General and administrative expenses 22,000 Freight-in 5,000
Additional data:
1. A physical count reveals an ending-inventory of $22,500 on December 31.
2. Twenty-five thousand shares of common stock have been outstanding the entire year.
3. The income tax rate is 30% on all items of income.
Required:
a. As a supporting document for Requirements 2 and 3, prepare a separate schedule for Schuch's cost of goods sold.
b. Prepare a 2013 multiple-step income statement.
c. Prepare a 2013 single-step income statement.
Answer:
Schuch Company
a) Schedule of Cost of Goods Sold
Inventory, January 1 $40,000
Purchases 110,000
Purchases returns -3,500
Freight-in 5,000
Cost of goods available for sale $151,500
less Inventory, December 31 22,500
Cost of goods sold $129,000
b) Multi-step Income Statement
For the year ended December 31, 2013:
Net Sales Revenue $278,000
Cost of Goods Sold 129,000
Gross profit $149,000
Expenses:
Selling expenses 35,000
General & admin exp. 22,000 57,000
Operating profit $92,000
Interest expense 4,000
Income after interest expense $88,000
Gain on sale of property (pretax) 7,000
Comprehensive income before tax $95,000
Income Tax (30%) 28,500
Net income $66,500
EPS = $2.66
c) Single-step Income Statement
For the year ended December 31, 2013:
Net Sales Revenue $278,000
Gain on sale of property (pretax) 7,000
Total revenue and gains $285,000
Cost of Goods Sold 129,000
Selling expenses 35,000
General & admin exp. 22,000
Interest expense 4,000
Total expenses $190,000
Income before taxes $95,000
Income Taxes (30%) 28,500
Net income $66,500
EPS = $2.66
Explanation:
a) Data and Calculations:
December 31 adjusted trial balance:
Inventory, January 1 $40,000
Purchases returns $3,500
Selling expenses 35,000
Interest expense 4,000
Purchases 110,000
Sales discounts taken 2,000
Sales 280,000
Gain on sale of property (pretax) 7,000
General and administrative expenses 22,000
Freight-in 5,000
Additional data:
Ending Inventory $22,500
Common Stock outstanding = 25,000
Income tax rate = 30%
Sales $ 280,000
Sales discounts taken 2,000
Net Sales Revenue $278,000