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17. Predetermined Overhead Rate, Application of Overhead to Jobs, Job Cost On April 1, Sangvikar Comp...Predetermined Overhead Rate, Application of Overhead to Jobs, Job Cost On April 1, Sangvikar Company had the following balances in its inventory accounts: Materials Inventory $12,680 Work-in-Process Inventory 21,070 Finished Goods Inventory 8,710 Work-in-process inventory is made up of three jobs with the following costs: Job 114 Job 115 Job 116 Direct materials $2,395 $2,678 $3,628 Direct labor 1,900 1,640 4,440 Applied overhead 1,045 902 2,442 During April, Sangvikar experienced the transactions listed below. Materials purchased on account, $29,300. Materials requisitioned: Job 114, $16,200; Job 115, $12,050; and Job 116, $4,750. Job tickets were collected and summarized: Job 114, 150 hours at $11 per hour; Job 115, 200 hours at $14 per hour; and Job 116, 80 hours at $17 per hour. Overhead is applied on the basis of direct labor cost. Actual overhead was $4,395. Job 115 was completed and transferred to the finished goods warehouse. Job 115 was shipped, and the customer was billed for 125 percent of the cost. Required: 1. Calculate the predetermined overhead rate based on direct labor cost. .35 % of direct labor cost 2. Calculate the ending balance for each job as of April 30. When required, round your answers to the nearest dollar. Use your rounded answers in subsequent computations, if necessary. Ending Balance Job 114 $ 23190 Job 115 $ Job 116 $ 3. Calculate the ending balance of Work in Process as of April 30. When required, round your answer to the nearest dollar. $ 4. Calculate the cost of goods sold for April. When required, round your answer to the nearest dollar. $ 5. Assuming that Sangvikar prices its jobs at cost plus 25 percent, calculate the price of the one job that was sold during April. Round to the nearest dollar. $
18. BE3–5 Rebel Technology maintains its records using cash-basis accounting. During the year, the...
BE3–5 Rebel Technology maintains its records using cash-basis accounting. During the year, the company
received cash from customers, $50,000, and paid cash for salaries, $21,900. At the beginning of the year,
customers owe Rebel $1,100. By the end of the year, customers owe $8,000. At the beginning of the year, Rebel owes salaries of $7,000. At the end of the year, Rebel owes salaries of $4,000. Determine cash-basis net income and accrual-basis net income for the year.
Record the adjusting entry for supplies (LO3–3)
19. 1. Which of the following does not describe accounting? a. Language of business. b. Is an end rather
1. Which of the following does not describe accounting?
a. Language of business.
b. Is an end rather than a means to an end.
c. Useful for decision making.
d. Used by business, government, non profi t organizations, and individuals. 2. To understand and use accounting information in making economic decisions, you must understand:
a. The nature of economic activities that accounting information describes.
b. The assumptions and measurement techniques involved in developing accounting information.
c. Which information is relevant for a particular type of
decision that is being made.
d. All of the above.
20. 130. Using a LIFO perpetual cost flow, calculate the value of the ending inventory and the cost...
130. Using a LIFO perpetual cost flow, calculate the value of the ending inventory and the cost of goods sold for the month of November of Beamer Company using the data below.
Nov 1 Purchased 600 units $80 each
Nov 4 Sold 200 units
Nov 11 Purchased 350 units $82 each
Nov 12 Sold 275units
Nov 22 Purchased 175 units $84 each
Nov 23 Sold 155 units
Calculate the following:
1. Inventory valuation at the end of November
2. Calculate the Cost of Goods Sold for November
131. Complete the following table using the perpetual FIFO method of inventory flow.
Inventory Valuation Perpetual FIFO
Date Purchased Units Unit
Cost Units
Sold Unit
Cost Inventory Units Balance Unit
Costs Inventory Dollar
Balance
2-Jul 600 12
Bal.
5-Jul 200
13
Bal.
7-Jul
300
Bal.
10-Jul 325
14
Bal.
Jul 300
150
Bal.
18-Jul 250 13
Bal.
22-Jul 50
205
Bal.
25-Jul 120
180
Bal.
28-Jul 330 15
Bal.
31-Jul 70
5
Ending
Balance FIFO INVENTORY VALUATION:
21. Post the April journal entries to the ledger. Assume that all entries are posted from page 1 of the...
The Classic Theater is owned by Kim Lockerby. All facilities were completed on March 31. At this time, the ledger showed: No. 101 Cash $4,000, No. 140 Land $10,000, No. 145 Buildings (concession stand, projection room, ticket booth, and screen) $8,000, No. 157 Equipment $6,000, No. 201 Accounts Payable $2,000, No. 275 Mortgage Payable $8,000, and No. 301 Owner's Capital $18,000. During April, the following events and transactions occurred.
2 Paid film rental of $1,100 on first movie.
3 Ordered two additional films at $1,000 each.
9 Received $2,800 cash from admissions.
10 Made $2,000 payment on mortgage and $1,000 for accounts payable due.
11 Classic Theater contracted with Rhonda Humes to operate the concession stand. Humes is to pay Classic Theater 17% of gross concession receipts, payable monthly, for the rental of the concession stand.
12 Paid advertising expenses $500.
20 Received one of the films ordered on April 3 and was billed $1,000. The film will be shown in April.
25 Received $5,200 cash from admissions.
29 Paid salaries $2,000.
30 Received statement from Rhonda Humes showing gross concession receipts of $1,000 and the balance due to The Classic Theater of $170 ($1,000 × 17%) for April. Humes paid one-half of the balance due and will remit the remainder on May 5.
30 Prepaid $1,200 rental on special film to be run in May.
In addition to the accounts identified above, the chart of accounts shows: No. 112 Accounts Receivable, No. 136 Prepaid Rent, No. 400 Service Revenue, No. 429 Rent Revenue, No. 610 Advertising Expense, No. 726 Salaries and Wages Expense, and No. 729 Rent Expense.
Instructions
(a) Enter the beginning balances in the ledger as of April 1. Insert a check mark ( ) in the reference column of the ledger for the beginning balance.
(b) Journalize the April transactions. Classic records admission revenue as service revenue, rental of the concession stand as rent revenue, and film rental expense as rent expense.
(c) Post the April journal entries to the ledger. Assume that all entries are posted from page 1 of the journal.
(d) Prepare a trial balance on April 30, 2014.
22. Moonlight Bay Inn is incorporated on January 2, 2010, by
Moonlight Bay Inn is incorporated on January 2, 2010, by its three owners, each of whom contributes $20,000 in cash in exchange for shares of stock in the business. In addition to the sale of stock, the following transactions are entered into during the month of January:
January 2: A Victorian inn is purchased for $50,000 in cash. An appraisal performed on this date indicates that the land is worth $15,000, and the remaining balance of the purchase price is attributable to the house. The owners estimate that the house will have an estimated useful life of 25 years and an estimated salvage value of $5,000.
January 3: A two-year, 12%, $30,000 promissory note was signed at Second State Bank. Interest and principal will be repaid on the maturity date of January 3, 2012.
January 4: New furniture for the inn is purchased at a cost of $15,000 in cash. The furniture has an estimated useful life of ten years and no salvage value.
January 5: A 24-month property insurance policy is purchased for $6,000 in cash.
January 6: An advertisement for the inn is placed in the local newspaper. Moonlight Bay pays $450 cash for the ad, which will run in the paper throughout January.
January 7: Cleaning supplies are purchased on account for $950. The bill is payable within 30 days.
January 15: Wages of $4,230 for the first half of the month are paid in cash.
January 16: A guest mails the business $980 in cash as a deposit for a room to be rented for two weeks. The guest plans to stay at the inn during the last week of January and the first week of February.
January 31: Cash receipts from rentals of rooms for the month amount to $8,300.
January 31: Cash receipts from operation of the restaurant for the month amount to $6,600.
January 31: Each stockholder is paid $200 in cash dividends
Required
1. Identify and analyze each of the preceding transactions.
2. Prepare a list of accounts and their balances for Moonlight Bay at January 31, 2010. Reflect the recurring transactions for the month of January but not the necessary month-end adjustments.
3. Identify and analyze the necessary adjustments for each of the following:
a. Depreciation of the house
b. Depreciation of the furniture
c. Interest on the promissory note
d. Recognition of the expired portion of the insurance
e. Recognition of the earned portion of the guest’s deposit
f. Wages earned during the second half of January amount to $5,120 and will be paid on February
3. g. Cleaning supplies on hand on January 31 amount to $230.
h. A gas and electric bill that is received from the city amounts to $740 and is payable by February 5.
i. Income taxes are to be accrued at a rate of 30% of income before taxes.
4. Prepare in good form the following financial statements:
a. Income statement for the month ended January 31, 2010
b. Statement of retained earnings for the month ended January 31, 2010
c. Balance sheet at January 31, 2010
5. Assume that you are the loan officer at Second State Bank. (Refer to the transaction on January 3.) What are your reactions to Moonlight’s first month of operations? Are you comfortable with the loan you made? Explain your answer.
23. Flexible Budgeting and Variance Analysis
Flexible Budgeting and Variance Analysis
Belgian Chocolate Company makes dark chocolate and light chocolate. Both products require cocoa and sugar. The following planning information has been made available:
Standard Amount per Case
Dark Chocolate Light Chocolate Standard Price per Pound
Cocoa 11 lbs. 8 lbs. $5.40
Sugar 9 lbs. 13 lbs. 0.60
Standard labor time 0.50 hr. 0.60 hr.
Dark Chocolate Light Chocolate
Planned production 5,400 cases 10,100 cases
Standard labor rate $13.50 per hr. $13.50 per hr.
Belgian Chocolate does not expect there to be any beginning or ending inventories of cocoa or sugar. At the end of the budget year, Belgian Chocolate had the following actual results:
Dark Chocolate Light Chocolate
Actual production (cases) 5,100 10,500
Actual Price per Pound Actual Pounds Purchased and Used
Cocoa $5.50 140,800
Sugar 0.55 177,800
Actual Labor Rate Actual Labor Hours Used
Dark chocolate $13.00 per hr. 2,320
Light chocolate 14.00 per hr. 6,460
Required:
1. Prepare the following variance analyses for both chocolates and total, based on the actual results and production levels at the end of the budget year:
1. Direct materials price variance,direct materials quantity variance, and total variance.
2. Direct labor rate variance,direct labor time variance, and total variance.
Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. If there is no variance, enter a zero.
a. Direct materials price variance: $
Direct materials quantity variance: $
Total direct materials cost variance: $
b. Direct labor rate variance: $
Direct labor time variance: $
Total direct labor cost variance: $
Here is the information given to help from the assignment; I just can't seem to figure out how to do it! Check My Work Feedback a. Price variance is the difference between the actual and standard prices, multiplied by the actual quantity. Quantity variance is the difference between the actual and standard quantities, multiplied by the standard price. Total variance is the price variance plus the quantity variance, considering their identifications as favorable or unfavorable.
b. Labor rate variance is the difference between the actual and standard hourly rates, multiplied by the actual hours. Time variance is the difference between the actual and standard hours, multiplied by the standard rate per hour. Total variance is the rate variance plus the time variance, considering their identifications as favorable or unfavorable.
c. Review how actual production is analyzed by using standard amounts.
When posting answers, please show work on how you got to answer. Thanks!
24. Assume that you are the president of your company and paid a year-end bonus according to the...
Assume that you are the president of your company and paid a year-end bonus according to the amount of net income earned during the year. When prices are rising, would you choose a FIFO or weighted average cost flow assumption? Explain, using an example to support your answer. Would your choice be the same if prices were falling?
25. Natalie is busy establishing both divisions of her business (cookie classes and mixer sales) and...
Natalie is busy establishing both divisions of her business (cookie classes and mixer sales) and completing her business degree. Her goals for the next 11 months are to sell one mixer per month and to give two to three classes per week. The cost of the fine European mixers is expected to increase. Natalie has just negotiated new terms with Kzinski that include shipping costs in the negotiated purchase price (mixers will be shipped FOB destination). Assume that Natalie has decided to use a periodic inventory system and now must choose a cost flow assumption for her mixer inventory. The following transactions occur in February to May 2008. Feb. 2 Natalie buys two deluxe mixers on account from Kzinski Supply Co. for $1,200 ($600 each), FOB destination, terms n/30. 16 She sells one deluxe mixer for $1,050 cash. 25 She pays the amount owed to Kzinski. Mar. 2 She buys one deluxe mixer on account from Kzinski Supply Co. for $618, FOB destination, terms n/30. 30 Natalie sells two deluxe mixers for a total of $2,300 cash. 31 She pays the amount owed to Kzinski. Apr. 1 She buys two deluxe mixers on account from Kzinski Supply Co. for $1,224 ($612 each), FOB destination, terms n/30. 13 She sells three deluxe mixers for a total of $3,450 cash. 30 Natalie pays the amounts owed to Kzinski. May 4 She buys three deluxe mixers on account from Kzinski Supply Co. for $1,875 ($573.33 each), FOB destination, terms n/30. 27 She sells one deluxe mixer for $1,150 cash. Instructions (a) Prepare jouranl entries for each of the transactions. (b) Determine the cost of goods available for sale. Recall from Chapter 5 that at the end of January, Cookie Creations had three mixers on hand at a cost of $595 each. (c) Calculate (i) ending inventory, (ii) cost of goods sold, (iii) gross profit, and (iv) gross profit rate under each of the following methods: LIFO, FIFO, and average cost. (d) Natalie is thinking of getting a bank loan. If this is the only factor Natalie hs to consider in choosing an inventory cost flow assumption, which cost flow assumption would you recommend that Natalie use? Why?
26. Roy decides to buy a personal residence and goes to the bank for a $150,000 loan. The bank
Roy decides to buy a personal residence and goes to the bank for a $150,000 loan. The bank tells him that he can borrow the funds at 4% if his father will guarantee the debt. Roy’s father, Hal, owns a $150,000 CD currently yielding 3.5%. The Federal rate is 3%. Hal agrees to either of the following:
• Roy borrows from the bank with Hal’s guarantee to the bank.
• Cash in the CD (with no penalty) and lend Roy the funds at 2% interest. Hal is in the 33% marginal tax bracket. Roy, whose only source of income is his salary, is in the 15% marginal tax bracket. The interest Roy pays on the mortgage will be deductible by him. Which option will maximize the family’s after-tax wealth?
27. Quatro Co. issues bonds dated January 1, 2017, with a par value of $900,000. The bonds’ annual contr
Quatro Co. issues bonds dated January 1, 2017, with a par value of $900,000. The bonds’ annual contract rate is 10%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 8%, and the bonds are sold for $947,165.
1. Prepare an amortization table for these bonds; use the straight-line method to amortize the premium. (Round your intermediate calculations to the nearest dollar amount.)
Semiannual Interest Unamortized Period-End Carrying Value Premium 01/01/2017 06/30/2017 12/31/2017 06/30/2018 12/31/2018 06/30/2019 12/31/2019
28. Audiophonics Limited manufactures and sells high-quality and durable ear buds for use with personal.
Audiophonics Limited manufactures and sells high-quality and durable ear buds for use with personal electronics that are custom moulded to each customer’s ear. Cost data for the product follow: Variable costs per unit: Direct materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12 Direct labour. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Variable factory overhead. . . . . . . . . . . . . . . . . . . . . . . . . 8 Variable selling and administrative . . . . . . . . . . . . . . . . . 6 Total variable costs per unit . . . . . . . . . . . . . . . . . . . . . . . $50 Fixed costs per month: Fixed manufacturing overhead. . . . . . . . . . . . . . . . . . . . . $240,000 Fixed selling and administrative. . . . . . . . . . . . . . . . . . . . 180,000 Total fixed costs per month . . . . . . . . . . . . . . . . . . . . . . . $420,000 The product sells for $80 per unit. Production and sales data for May and June, the first two months of operations, are as follows: Income statements prepared by the Accounting Department using absorption costing are presented below: Required: 1. Determine the unit product cost under a. Absorption costing. b. Variable costing. 2. Prepare variable costing income statements for May and June using the contribution approach. 3. Reconcile the variable costing and absorption costing operating income figures. 4. The company’s Accounting Department has de
