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34. On December 15, 2006, Arp declared dividends of $100,000. What was the amount of dividends payable...Arp Corp.’s outstanding capital stock at December 15, 2006, consisted of the following:
• 30,000 shares of 5% cumulative preferred stock, par value $10 per share, fully participating as to dividends. No dividends were in arrears.
• 200,000 shares of common stock, par value $1 per share.
On December 15, 2006, Arp declared dividends of $100,000. What was the amount of dividends payable to Arp’s common stockholders?
1. $10,000
2. $34,000
3. $40,000
4. $47,500
35. Gage Co. purchases land and constructs a service station and car wash for a total of $540,000. At...
Gage Co. purchases land and constructs a service station and car wash for a total of $540,000. At January 2, 2018, when construction is completed, the facility and land on which it was constructed are sold to a major oil company for $600,000 and immediately leased from the oil company by Gage. Fair value of the land at time of the sale was $60,000. The lease is a 10-year, noncancelable lease. Gage uses straight-line depreciation for its other various business holdings. The economic life of the facility is 15 years with zero salvage value. Title to the facility and land will pass to Gage at termination of the lease. A partial amortization schedule for this lease is as follows: Payments Interest Amortization Balance Jan. 2, 2018 $600,000.00 Dec. 31, 2018 $97,646.71 $60,000.00 $37,646.71 562,353.29 Dec. 31, 2019 97,646.71 56,235.33 41,411.38 520,941.91 Dec. 31, 2020 97,646.71 52,094.19 45,552.52 475,389.39 From the viewpoint of the lessor, what type of lease is involved above? Sales-type lease Sale-leaseback Direct-financing lease Operating lease
36. In the RST partnership, Ron's capital is $80,000, Stella's is $75,000, and Tiffany's is $50,000. ...
In the RST partnership, Ron's capital is $80,000, Stella's is $75,000, and Tiffany's is $50,000. They share income in a 3:2:1 ratio, respectively. Tiffany is retiring from the partnership. Each of the following questions is independent of the others.
Refer to the above information. Tiffany is paid $60,000, and no goodwill is recorded. In the journal entry to record Tiffany's withdrawal:
A. Tiffany, Capital will be credited for $60,000.
B. Ron, Capital will be debited for $5,000.
C. Stella, Capital will be debited for $4,000.
D. Cash will be debited for $60,000.
37. PR 6-2B LIFO Perpetual Inventory OBJ.2, 3 SPREADSHEET The beginning inventory for Dunne Co. and p...
PR 6-2B LIFO Perpetual Inventory OBJ.2, 3 SPREADSHEET The beginning inventory for Dunne Co. and purchases and sales data on for a three-month period are shown in Problem 6-1B. Instructions 1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4, using the last-in, first-out method. 2. Determine the total sales, the total cost of merchandise sold, and the gross profit from sales for the period Answer Check Figure: Gross profit, $213,170 3. Determine the ending inventory cost on June 30, 2014.
38. A manufacturing company shows the following amounts in the income statement for 19B
A manufacturing company shows the following amounts in the income statement for 19B:
Materials Used $590,000
Cost of Goods Sold 750,000
Cost of Goods Manufactured 800,000
Total Manufacturing Costs 790,000
1. Determine the amounts of (a) and (b)in the balance sheets of 12/31/19Aand 12/31/19B
Inventories
12/31/19A 1213 111 9B
Materials $100,000 $150,000
Work-in-process (a) 87,000
Finished goods 80,000 (b)
2. Compute the amount of materials purchased in 19B.
39. Cost of production report Fresh Mountain Coffee Company roasts and packs coffee beans. The...
Cost of production report
Fresh Mountain Coffee Company roasts and packs coffee beans. The process begins by placing coffee beans into the Roasting Department. From the Roasting Department, coffee beans are then transferred to the Packing Department. The following is a partial work in process account of the Roasting Department at March 31, 2016:
ACCOUNT Work in Process—Roasting Department
ACCOUNT NO.
Date
Item
Debit
Credit Balance
Debit Credit
Mar.
1
Bal., 1,500 units, 30% completed
86,970
?
6,150
31 Direct materials, 22,300 units 93,120
31 Direct labor 11,900 105,020
31 Factory overhead 5,772 110,792
31 Goods transferred, 21,700 units
31 Bal., ? units, 40% completed ?
instructions
1. Prepare a cost of production report, and identify the missing amounts for Work in Process—Roasting Department.
2. Assuming that the March 1 work in process inventory includes $5,700 of direct ma- terials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between
40. Comprehensive Problem 1 Part 4 and Part 6 The following is a comprehensive problem which encompas...
Comprehensive Problem 1 Part 4 and Part 6 The following is a comprehensive problem which encompasses all of the elements learned in previous chapters. You can refer to the objectives for each chapter covered as a review of the concepts. Note: You must complete parts i, 2 and 3 before completing parts 4 and 6. Please note that part 5is optional. Part 4: At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6). a. Insurance expired during May is $275. b. Supplies on hand on May 31 are $715. c. Depreciation of office equipment for May is $330. d. Accrued receptionist salary on May 31 is $325. e. Rent expired during May is $1,600. f, Unearned fees on May 31 are $3,210. Part 6: Journalize the adjusting entries. Then, post the entries to the attached spreadsheet from part 2. a. Insurance expired during May is $275. Account Name Post. Ref Debit Credit b. Supplies on hand on May 31 are $715. Account Name Post. Ref. Debit Credit Sele c. Depreciation of office equipment for May is $330. Post. Ref Debit Account Name Credit Sele d. Accrued receptionist salary on May 31 is $325. Account Name Post. Ref. Debit Credit Select
41. Suppose that your company’s weighted-average cost of capital is 11 percent....
Suppose that your company’s weighted-average cost of capital is 11 percent. Your company is planning to undertake a project with an internal rate of return of 14 percent, but you believe that this project is not a wise investment for the firm. What logical arguments might you use to convince your boss to forego the project despite its high rate of return? Is it possible that making investments with expected returns higher than your company’s cost of capital will destroy value? If so, how?
42. Ex 12-21 Present value of bonds payable; discount Pinder Co. produces and sells high-quality...
Ex 12-21 Present value of bonds payable; discount
Pinder Co. produces and sells high-quality video equipment. To finance its operations, Pinder Co. issued $25,000,000 of five-year, 7% bonds, with interest payable semiannu- ally, at a market (effective) interest rate of 9%. Determine the present value of the bonds payable, using the present value tables in Exhibits 8 and 10. Round to the nearest dollar.
43. Prepaid insurance is the cost of a 2-year insurance policy, effective April 1
1. Terry Thomas opens the Green Thumb Lawn Care Company on April 1.At April 30, thetrial balance shows the following balances for selected accounts.
Prepaid Insurance $ 3,600
Equipment 28,000
Notes Payable 20,000
Unearned Revenue 4,200
Service Revenue 1,800
Analysis reveals the following additional data.
1. Prepaid insurance is the cost of a 2-year insurance policy, effective April 1.
2. Depreciation on the equipment is $500 per month.
3.The note payable is dated April 1. It is a 6-month, 12% note.
4. Seven customers paid for the company's 6 months' lawn service package of $600
beginning in April.The company performed services for these customers in April.
5. Lawn services provided other customers but not recorded at April 30 totaled $1,500.
44. Refer to DCdesserts.com’s activity-based flexible budget in Exhibit 11–11. Suppose that the...
Refer to DCdesserts.com’s activity-based flexible budget in Exhibit 11–11. Suppose that the company’s activity in June is described as follows: In Exhibit 11–11 .:. Process hours.............................................................. 9,000 Production runs.......................................................... 12 New products tested.................................................. 40 Direct material handled (pounds)............................. 30,000 Required: 1. Determine the flexible budgeted cost for each of the following: a. Indirect material b. Utilities c. Inspection d. Test kitchen e. Material handling f. Total overhead cost 2. Compute the variance for setup cost during the month, assuming that the actual setup cost was $3,500: a. Using the activity-based flexible budget. b. Using DCdesserts.com’s conventional flexible budget (Exhibit 11–3).
45. When a seller of merchandise allows a customer a reduction from the original price for defective...
When a seller of merchandise allows a customer a reduction from the original price for defective goods, the seller usually issues to the customer a(n):
a. debit memorandum
b. credit memorandum
c. sales invoice
d. inventory slip
46. Aladili Company is a manufacturing firm that uses job-order costing
Aladili Company is a manufacturing firm that uses job-order costing. At the beginning of the year, the company's inventory balances were as follows:
Raw materials $36,000
Work in process $41,000
Finished goods $104,000
The company applies overhead to jobs using a predetermined overhead rate based on machine ours. At the beginning of the year, the company estimated that it would work 21,000 machine-hours and incur $210,000 in manufacturing overhead cost. The following transactions were recorded for the year:
a. Raw materials were purchased, $346,000.
b. Raw materials were requisitioned for use in production, $338,000 ($302,000 direct and $36,000 indirect).
c. The following employee costs were incurred: direct labor, $360,000; indirect labor, $68,000; and administrative salaries, $111,000.
d. Selling costs, $153,000.
e. Factory utility costs, $29,000.
f. Depreciation for the year was $102,000 of which $93,000 is related to factory operations and $9,000 is related to selling and administrative activities.
g. Manufacturing overhead was applied to jobs. The actual level of activity for the year was 19,000 machine-hours.
h. The cost of goods manufactured for the year was $870,000.
i. Sales for the year totaled $1,221,000 and the costs on the job cost sheets of the goods that were sold totaled $855,000.
j. The balance in the Manufacturing Overhead account was closed out to Cost of Goods Sold.
Required:
Prepare the appropriate journal entry for each of the items above (a. through j.). You can assume that all transactions with employees, customers, and suppliers were conducted in cash.
47. Europa Publications, Inc. specializes in reference books that keep abreast of the rapidly changin..
Europa Publications, Inc. specializes in reference books that keep abreast of the rapidly changing political and economic issues in Europe. The results of the company's operations during the prior year are given in the following table. All units produced during the year were sold. (Ignore income taxes.) Sales revenue Manufacturing costs: $1,550,000 Fixed Variable 358,000 888,000 Selling costs: Fixed Variable 31,000 61,000 Administrative costs: Fixed Variable 71,000 26,000 Required 1-a. Prepare a traditional income statement for the company. 1-b. Prepare a contribution income statement for the company. 2. What is the firm's operating leverage for the sales volume generated during the prior year? 3. Suppose sales revenue increases by 14 percent. What will be the percentage increase in net income? 4. Which income statement would an operating manager use to answer requirement (3)?
48. 43. Fred, Inc., and Herman Corporation formed a business combination on January 1,2012, when Fred...
43. Fred, Inc., and Herman Corporation formed a business combination on January 1,2012, when Fred acquired a 60 percent interest in Herman's common stock for $312,000 in cash. The book value of Herman's assets and liabilities on that day totaled $300,000 and the fair value of the noncontrolling interest was $208,000. Patents being held by Herman (with a 12-year remaining life) were undervalued by S90,000 within the company's financial records and a customer list (10-year life) worth $130,000 was also recognized as part of the acquisition-date fair value.
49. Bosques Corporation has in stock 35, 800 kilograms of material L that it bought five years ago fo...
Bosques Corporation has in stock 35, 800 kilograms of material L that it bought five years ago for $5.55 per kilogram. This raw material was purchased to use in a product line that has been discontinued. Material L can be sold as is for scrap for $1.67 per kilogram. An alternative would be to use material L in one of the company's current products, Q08C, which currently requires 2 kilograms of a raw material that is available for $9.15 per kilogram. Material L can be modified at a cost of $0.78 per kilogram so that it can be used as a substitute for this material in the production of product Q08C. However, after modification. 4 kilograms of material L is required for every unit of product Q08C that is produced. Bosques Corporation has now received a request from a company that could use material L in its production process. Assuming that Bosques Corporation could use all of its stock of material L to make product Q08C or the company could sell all of its stock of the material at the current scrap price of $1.67 per kilogram, what is the minimum acceptable selling price of material L to the company that could use material L in its own production process? A. $5.365 per kg B. $3.795 per kg C. $2.133 per kg D. $1.675 per kg Wenig Inc. has some material that originally cost $73, 500. The material has a scrap value of $45, 600 as is, but if reworked at a cost of $6, 600, it could be sold for $58, 100. What would be the incremental effect on the company's overall profit of reworking and selling the material rather than selling it as is as scrap? A. Decrease of $22,000 B. Decrease of $67, 600 C. Increase of $51, 500 D. Increase of $5, 900 Ricic Corporation has provided the following data for one of its products: The throughput time for this operation is: _____ days
50. In 2016, Lou has a salary of $53,300 from her job. She also has interest income of $1,600 and div...
In 2016, Lou has a salary of $53,300 from her job. She also has interest income of $1,600 and dividend income of $400. Lou is single and has no dependents. During the year, Lou sold silver coins held as an investment for a $7,000 loss.
Table for the standard deduction Filing Status 2016 Standard Deduction
Single $ 6,300
Married, filing jointly 12,600
Married, filing separately 6,300
Head of household 9,300
Qualifying widow(er) 12,600
Calculate the following amounts for Lou:
a. Adjusted gross income $
b. Standard deduction $
c. Exemption $
d. Taxable income
