Strategic Approaches for Excel-based Accounting Modules

Published: 8 months ago

Strategic Approaches for Excel-based Accounting Modules

1. Prepare a balance sheet for Petrello Company immediately after the merger.

Acquisition Method

The balance sheets of Petrello Company and Sanchez Company as of January 1, 2011, are presented below. On that date, after an extended period of negotiation, the two companies agreed to merge. To effect the merger, Petrello Company is to exchange its unissued common stock for all the outstanding shares of Sanchez Company in the ratio of ½ share of Petrello for each share of Sanchez. Market values of the shares were agreed on as Petrello, $48; Sanchez, $24. The fair values of Sanchez Company"s assets and liabilities are equal to their book values with the exception of plant and equipment, which has an estimated fair value of $720,000.

Required:

Prepare a balance sheet for Petrello Company immediately after the merger.

2. Which of Weber’s and Fayol’s principles seem most relevant to the creation of an ethical...

Which of Weber’s and Fayol’s principles seem most relevant to the creation of an ethical organization?

3. English summary for Lola lago detective vacaciones del sol

English summary for Lola lago detective vacaciones del sol

4. Equipment upgrade versus replacement (A. Spero, adapted)

Equipment upgrade versus replacement (A. Spero, adapted) The TechMech Company produces sells 6,000 modular computer desks per year at a selling price of $500 each. Its current production equipment, purchased for $1,500,000 and with a five-year useful life, is only two years old. It has a terminal disposal value of $0 and is depreciated on a straight-line basis. The equipment has a current disposal price of $600,000. However, the emergence of a new molding technology has led TechMech to consider either upgrading or replacing the production equipment. The following table presents data for the two alternatives:



All equipment costs will continue to be depreciated on a straight-line basis. For simplicity, ignore income taxes and the time value of money.

1. Should TechMech upgrade its production line or replace it? Show your calculations.

2. Now suppose the one-time equipment cost to replace the production equipment is somewhat negotiable. All other data are as given previously. What is the maximum one-time equipment cost that TechMech would be willing to pay to replace the old equipment rather than upgrade it?

3. Assume that the capital expenditures to replace and upgrade the production equipment are as given in the original exercise, but that the production and sales quantity is not known. For what production and sales quantity would TechMech (i) upgrade the equipment or (ii) replace the equipment?

4. Assume that all data are as given in the original exercise. Dan Doria is TechMech’s manager, and his bonus is based on operating income. Because he is likely to relocate after about a year, his current bonus is his primary concern. Which alternative would Doria choose?Explain.

5. The accountant for Eva's Laundry prepared the following unadjusted and adjusted trial balances....

Adjusting entries from trial balances

The accountant for Eva's Laundry prepared the following unadjusted and adjusted trial balances. Assume that all balances in the unadjusted trial balance and the amounts of the adjustments are correct. Identify the errors in the accountant's adjusting entries, assuming that none of the accounts were affected by more than one adjusting entry.

6. How Does SAS Incorporate the P-O-L-C Framework? First, by way of introduction, share your major...

How Does SAS Incorporate the P-O-L-C Framework? First, by way of introduction, share your major concentration and how this course and program fit into your career goals. Next, read SAS: A New No. 1 Best Employer. As you read through this article, consider the introduction to the P-O-L-C framework that you received in this module. In your initial post, respond to the following question: How would you describe SAS’s employee management using the P-O-L-C framework? In addition, provide an example from SAS of each facet of the P-O-L-C framework: planning, organizing, leading, and controlling, and briefly explain how the example aligns with that facet. In responding to your peers, evaluate how their examples can impact employee management. Support your response with sound arguments and properly cited sources, when applicable.

7. Lamprino Appliance uses a perpetual inventory system. The following are three recent merchan-...

Lamprino Appliance uses a perpetual inventory system. The following are three recent merchan- dising transactions:

June 10    Purchased 10 televisions from Mitsu Industries on account. Invoice price, $300 per unit, for a total of $3,000. The terms of purchase were 2/10, n/30.

June 15    Sold one of these televisions for $450 cash.

June 20    Paid the account payable to Mitsu Industries within the discount period.

Instructions

a.       Prepare journal entries to record these transactions assuming that Lamprino records purchases of merchandise at:

1.       Net cost

2.       Gross invoice price

b.       Assume that Lamprino did not pay Mitsu Industries within the discount period but instead paid the full invoice price on July 10. Prepare journal entries to record this payment assuming that the original liability had been recorded at:

1.       Net cost

2.       Gross invoice price

c.        Assume that you are evaluating the efficiency of Lamprino’s bill-paying procedures. Which accounting method—net cost or gross invoice price—provides you with the most useful infor- mation? Explain.

8. Alden Co."s monthly sales and cost data for its operating activities of the past year follow...

Alden Co.’s monthly sales and cost data for its operating activities of the past year follow. Management wants to use these data to predict future fixed and variable costs.

Required

1. Prepare a scatter diagram for these data with sales volume (in $) plotted on the horizontal axis and total cost plotted on the vertical axis.

2. Estimate both the variable costs per sales dollar and the total monthly fixed costs using the high-low method. Draw the total costs line on the scatter diagram in part 1.

3. Use the estimated line of cost behavior and results from part 2 to predict future total costs when sales volume is (a) $380,000 and (b) $420,000.

9. Trivoli Industries plans to issue some $100 par preferred stock with an 11 percent dividend. The...

Trivoli Industries plans to issue some $100 par preferred stock with an 11 percent dividend. The stock is selling on the market for $97.00, and Trivoli must pay flotation costs of 5 percent of the market price. What is the cost of the preferred stock for Trivoli?

10. What is a ratio? How do ratios help to alleviate the problems of size differences among firms?

What is a ratio? How do ratios help to alleviate the problems of size differences among firms?

11. Delph Company uses a job- order costing system and has two manufacturing departments- Molding and...

Exercise 3-17 Plantwide and Departmental Overhead Rates; Job Costs

Delph Company uses a job- order costing system and has two manufacturing departments- Molding and Fabrication. The company provided the estimates at the beginning of the year:

Molding Fabrication Total

Machine hours 20,000 30,000 50,000

Fixed Manufacturing overhead costs $700,000 $210,000 $910,000

Variable Manufacturing overhead- Machine hour $3.00 $3.00

During the year, the company had no beginning or ending inventories and it started, completed and sold only two jobs- job D- 70 and job C- 200. It provided the following information related to these two jobs:

Job D- 7 Molding Fabrication Total

Direct Materials $375,000 $325,000 $700,000

Direct Labor Cost $200,000 $160,000 $350,000

Machine-hours 14,000 6,000 20,000

Job C- 200 Molding Fabrication Total

Direct Materials $300,000 $250,000 $550,000

Direct Labor Cost $175.000 $225,000 $400,000

Machine- hours 6,000 24,000 30,000

Delph had no overapplied or underapplied overhead during the year.

Required

1) Assume Dulph uses a overhead rate based on machine- hours

a. Compute the predetermined plantwide overhead rate.

b. Compute the total manufacturing costs assigned to job D-70 and job C- 200

c. If Dalph establishes bid prices that are 150% of total manufacturing costs, what bid price would it have established for job D- 70 and job C- 200

d. What is Delph's Cost of Goods Sold for the yeat?

2) Assume Delph uses departmental overhead rates based on machine hours

a. Compute the predetermined departmental overhead rates.

b. Compute the total manufacturing costs assigned to job D- 70 and job C-200

c. If Delph establishes bid prices that are 150%of total manufacturing costs, what bid price would it have established for job D-70 and job C-200

d, What is Delph's COGS for the year

What managerial insights are revealed by the computations that you performed in this problem? (hint: Do the COGS amounts that you computed in requirements 1 and 2 differ from one another? Do the bid prices that you computed in requirements 1 and 2 differ from one another? Why?)

12. Ryan Ross (111-11-1112), Oscar Omega (222-22-2222), Clark Carey (333-33-3333), and Kim Kardigan (...

Ryan Ross (111-11-1112), Oscar Omega (222-22-2222), Clark Carey (333-33-3333), and Kim Kardigan (444-44-4444) are equal active members in ROCK the Ages LLC. ROCK serves as agents and managers for prominent musicians in the Los Angeles area. The LLC's Federal ID number is 55-5555555. It uses the cash basis and the calendar year and began operations on January 1, 2004. Its current address is 6102 Wilshire Boulevard, Suite 2100, Los Angeles, CA 90036. ROCK was the force behind such music icons as Rhiannon, Burgundy Six, Elena Gomez, Tyler Quick, the Moonwalkers, and Conjuring Dragons and has had a very profitable year. The following information was taken from the LLC's income statement for the current year:

During the past couple of years, ROCK has taken advantage of bonus depreciation and § 179 deductions and fully remodeled the premises and upgraded its leasehold improvements. This year, ROCK wrapped up its remodel with the purchase of $20,000 of office furniture for which it will claim a § 179 deduction. (For simplicity, assume that ROCK uses the same cost recovery methods for both tax and financial purposes.) There is no depreciation adjustment for alternative minimum tax purposes.

ROCK invests much of its excess cash in non-dividend-paying growth stocks and tax-exempt securities. During the year, the LLC sold two securities. On June 15, 2015, ROCK purchased 1,000 shares of Tech, Inc., stock for $100,000; it sold those shares on December 15, 2015, for $80,000. On March 15, 2014, ROCK purchased 2,000 shares of BioLabs, Inc., stock for $136,000; it sold those shares for $160,000 on December 15, 2015. These transactions were reported to the IRS on Forms 1099–B; ROCK's basis in these shares was reported.

Net income per books is $840,000. The firm's activities do not constitute “qualified production activities” for purposes of the § 199 deduction. On January 1, 2015, the members' capital accounts equaled $200,000 each. No additional capital contributions were made in 2015. In addition to their guaranteed payments, each member withdrew $250,000 cash during the year. The LLC's balance sheet as of December 31, 2015, is as follows:

Assume that all debt is shared equally by the members. Each member has personally guaranteed the debt of the LLC.

The business code for “Agents and Managers for Artists, Athletes, Entertainers, and Other Public Figures” is 711410. The LLC's Form 1065 was prepared by Ryan Ross and sent to the Ogden, UT IRS Service Center. All members are active in LLC operations.

a. Prepare Form 1065, pages 1, 4, and 5, for ROCK the Ages LLC using tax basis information for Schedules L and M–2.

b. Prepare Form 4562 and Schedule D.

c. Prepare Schedule K–1 for Ryan Ross, 15520 W. Earlson Street, Pacific Palisades, CA 90272.

Revenues: Fees and commissions Taxable interest income from bank deposits Tax-exempt interest Net gain on stock sales Total revenues Expenses: Advertising and public relations Charitable contributions Section 179 expense Employee salaries and wages Guaranteed payment (services), Ryan Ross, office manager Guaranteed payment (services), other members Entertainment, subject to 50% disallowance Travel Legal and accounting fees Office rentals paid Interest expense on operating line of credit Insurance premiums Office expense Payroll taxes Utilities Total expenses $4,800,000 1,600 3,200 4,000 $4,808,800 380,000 28,000 20,000 1,000,000 800,000 600,000 200,000 320,000 132,000 80,000 10,000 52,000