Answer:
CRUZ COMPANY
1. Closing Entries:
No. Account Title Debit Credit
901 Income Summary $33,100
612 Depreciation expense
—Equipment $3,000
622 Salaries expense 22,000
637 Insurance expense 2,500
640 Rent expense 3,400
652 Supplies expense 2,200
To close expenses to the Income Summary.
404 Services revenue $44,000
901 Income Summary $44,000
To close Service Revenue to the Income Summary.
318 Retained earnings $37,600
901 Income Summary (Retained Earnings) $37,600
To close the Retained Earnings of prior year to Retained Earnings section of the Income Summary.
901 Income Summary
(Retained Earnings) $7,000
319 Dividends $7,000
To close the Dividends to the Retained Earnings section of the Income Summary.
2. CRUZ COMPANY
Post-Closing Trial Balance
As of December 31
No. Account Title Debit Credit
101 Cash $ 19,000
126 Supplies 13,000
128 Prepaid insurance 3,000
167 Equipment 24,000
168 Accumulated depreciation
—Equipment $ 7,500
307 Common stock 10,000
318 Retained earnings 41,500
Totals $ 59,000 $ 59,000
Explanation:
a) Data and Calculations:
CRUZ COMPANY
Trial Balance
As of December 31
No. Account Title Debit Credit
101 Cash $ 19,000
126 Supplies 13,000
128 Prepaid insurance 3,000
167 Equipment 24,000
168 Accumulated depreciation
—Equipment $ 7,500
307 Common stock 10,000
318 Retained earnings 37,600
319 Dividends 7,000
404 Services revenue 44,000
612 Depreciation expense
—Equipment 3,000
622 Salaries expense 22,000
637 Insurance expense 2,500
640 Rent expense 3,400
652 Supplies expense 2,200
Totals $ 99,100 $ 99,100
b) Income Summary for the year ended December 31:
Revenue $44,000
Expenses (33,100)
Net Income $10,900
Retained Earnings 37,600
Dividends (7,000)
Retained Earnings $41,500
Management of Solman Corporation has asked your help as an intern in preparing some key reports for June. The beginning balance in the raw materials inventory account was $20,000. During the month, the company made raw materials purchases amounting to $69,000. At the end of the month, the balance in the raw materials inventory account was $32,000. Direct labor cost was $24,000 and manufacturing overhead was $71,000. The beginning balance in the work in process account was $24,000 and the ending balance was $19,000. The beginning balance in the finished goods account was $53,000 and the ending balance was $58,000. Selling expense was $20,000 and administrative expense was $35,000. The conversion cost for June was:
Answer:
The conversion cost is $95,000
Explanation:
The computation of the conversion cost is shown below:
As we know that
Conversion cost
= Direct Labour + Overheads
where,
Direct labor is $24,000
And, the overhead is $71,000
Now placing these valeus to the above formula
So, the conversion cost is
= $24,000 + $71,000
= $95,000
Hence, the conversion cost is $95,000
Luther owns a bakery. He has been trying to obtain a long-term contact with the owner of Martha’s Tea Salons for some time. Luther starts a local advertising campaign on radio and television and in the newspaper. This advertising campaign is so persuasive that Martha decides to break the contract she has had with Harley’s Bakery so that she can patronize Luther’s bakery. Is Luther liable to Harley’s Baker for the tort of wrongful interference with a contractual relationship? Is Martha liable for this tort? Explain each part fully and completely.
Answer:
The full description of the particular circumstance is listed underneath in the overview section.
Explanation:
Throughout the one side, as either a consequence of getting fathomed their deal, I have seen whether it could be Luther's mistake and therefore tried repeatedly to be doing the promotions that may be thought of as unfair intervention, but it does not mean that he did so to mess with their deal when he could have simply considered mischievously promoting. As either a consequence of the positioning of these commercials, he undoubtedly planned to intervene legitimately with the mere truth of comprehension of the deal. Because Martha as well as Harley seems to have a deal, as a direct consequence of maintaining a long-term partnership within the deal, Martha may be the controller responsible for the unjust personal behavior, and Martha just skits the service agreement as something of a consequence of loving the advertisements.I wouldn’t believe they would always keep Martha accountable for anything although she might using the justification that religion gave her a more comprehensive bargain that is fair to justify unjust action. There seem to be no separate offenses whereby Harley can use for her protection, such as aggravated assault or slander.What is Kaycie’s net income?
Answer:
More info needed. (See Explanation):
Explanation: Needed more info to be solveable.
Answer:
1195
Explanation:
The Saunders Investment Bank has the following financing outstanding. Debt: 50,000 bonds with a coupon rate of 7 percent and a current price quote of 110; the bonds have 20 years to maturity. 220,000 zero coupon bonds with a price quote of 18 and 30 years until maturity. Assume semiannual compounding. Preferred stock: 140,000 shares of 5 percent preferred stock with a current price of $80, and a par value of $100. Common stock: 2,500,000 shares of common stock; the current price is $66, and the beta of the stock is 1.2. Market: The corporate tax rate is 35 percent, the market risk premium is 6 percent, and the risk-free rate is 3 percent. What is the WACC for the company
Answer:
the company's WACC = 7.85%
Explanation:
we must first determine the market value of debt, preferred stocks and common stocks:
debt 1 = 50,000 x $1,000 x 1.1 = $55,000,000, weight 20.31%
debt 2 = 220,000 x $1,000 x 0.18 = $39,600,000, weight 14.62%
preferred stock = 140,000 x $80 = $11,200,000. weight 4.14%
common stock = 2,500,000 x $66 = $165,000,000, weight 60.93%
total market value = $270,800,000
cost of debt 1:
YTM = {35 + [(1,000 - 1,100)/40]} / [(1,000 + 1,100)/2] = 32.5/1,050 = 3.095 x 2 = 6.19%
after tax cost = 6.19% x 0.65 = 4.02%
cost of debt 2:
price = face value / (1 + i)ⁿ
180 = 1,000 / (1 + i)³⁰
(1 + i)³⁰ = 1,000 / 180 = 5.55555
³⁰√(1 + i)³⁰ = ³⁰√5.55555
1 + i = 1.058825
i = 0.058825 = 5.8825%
after tax cost = 5.8825% x 0.65 = 3.82%
cost of preferred stocks = 5 / 80 = 6.25%
cost of equity:
Re = Rf + (B x MP) = 3% + (1.2 x 6%) = 10.2%
the company's WACC = (60.93% x 0.102) + (4.14% x 0.0625) + (20.31% x 0.0402) + (14.62% x 0.0382) = 6.21% + 0.26% + 0.82% + 0.56% = 7.85%
g Bob estimates when he retires in 20 years, he will need to have $2,000,000 to finance his desired retirement lifestyle. He believes inflation will average 2% over time and their retirement investment return will average 6% until he retires. After retirement, he will invest more conservatively and the portfolio will average a 5% return during a 25 year retirement. If he currently has nothing saved for retirement, what initial amount must he save if his intention is to increase his retirement fund contribution at the inflation rate each year to meet the savings goal
Answer:
Bob will need to contribute $43,704.39
at the end of each period to reach the future value of $2,000,000.00.
Explanation:
a) Data and Calculations:
Period when Bob estimates to retire = 20 years
Desired Future retirement funds = $2,000,000
Average inflation rate over time = 2%
Retirement investment returns = 6%
Expected interest rate = 8% compounded annually (6 + 2)%
Using an online finance calculator,
Bob will need to contribute $43,704.39 at the end of each period to reach the future value of $2,000,000.00.
FV (Future Value) $1,999,998.68
PV (Present Value) $429,096.13
N (Number of Periods) 20.000
I/Y (Interest Rate) 8.000%
PMT (Periodic Payment) $43,704.39
Starting Investment $0.00
Total Principal $874,087.78
Total Interest $1,125,910.9
4. If you were a technical designer, what other positions could you pursue?
The Smelting Department of Kiner Company has the following production data for November.Production: Beginning work in process 4,000 units that are 100% complete as to materials and 27% complete as to conversion costs; units transferred out 9,500 units; and ending work in process 7,700 units that are 100% complete as to materials and 50% complete as to conversion costs.Compute the equivalent units of production for (a) materials and (b) conversion costs for the month of November.
Answer:
For material 17,200
For conversion 13,350
Explanation:
The computation of equivalent units of production for (a) materials and (b) conversion costs are shown below:-
Particulars Whole units Materials Conversion costs
Units transferred out 9,500 9,500 9,500
Ending Work in process 7,700 7,700 3,850
(7,700 × 50%)
Total equivalent units 17,200 17,200 13,350
Presented below is information related to Windsor Company at December 31, 2020, the end of its first year of operations.
Sales revenue $333,190
Cost of goods sold 138,130
Selling and administrative expenses 50,100
Gain on sale of plant assets 28,720
Unrealized gain on available-for-sale debt investments 10,340
Interest expense 6,350
Loss on discontinued operations 13,060
Dividends declared and paid 4,950
Compute the following:________.a) Income from operations b) Net Income c) Net income from attributable to Viel Company's controlling shareholds d) Comprehensive income e) Retained earnings balance at December 31, 2014
Answer:
(A) $144,960
(B) $109,890
(C) $107,170
(D) $102,220
Explanation:
(A) The income from operation can be calculated as follows
= Sales - cost of good sold -selling and administrative expenses
= $333,190-$138,130-$50,100
= $144,960
(B) The net income can be calculated as follows
= Sales - gain in sales of plant assets -cost of good sold-selling and administrative expense - interest expenses
= $333,190-28,720-138,130-50,100-6,350
= $109,890
(C) The comprehensive income can be calculated as follows
= Net income + unrealized gain on available for sale investment -loss in discontinued operation
= $109,890+ $10,340-$13,060
= $107,170
(D) The retained earnings balance at December 31, 2014 can be calculated as follows
= comprehensive income - Dividend declared and paid
= $107,170 - $4950
= $102,220
Use the following data to determine the total dollar amount of assets to be classified as property, plant, and equipment.
Sheffield Corp.
Balance Sheet
December 31, 2022
Cash $128400 Accounts payable $171000
Accounts receivable 124200 Salaries and wages payable 31400
Inventory 207000 Note payable (due 2025) 267000
Short-term investments 90000 Total liabilities $469400
Land (held for future use) 254000 Land 281000
Buildings $336500 Common stock $362000
Less: Accumulated
depreciation (62900) 273600 Retained earnings 739200
Franchise 212400 Total stockholders' equity $1101200
Total assets $1570600 Total liabilities and
stockholders' equity $1570600
a. $821600.
b. $761600
c. $554600.
d. $1019600.
Answer:
c. $554600.
Explanation:
The computation of the property, plant & equipment is shown below:
= Land + Building - Accumulated depreciation
= $281,000 + $336,500 - $62,900
= $554,600
By applying the above formula so that the property, plant & equipment could be come and the same is to be considered
Hence, the correct option is c. $554,600
Required information Problem 4-33 (LO 4-1) (Algo) [The following information applies to the questions displayed below.] Nitai, who is single and has no dependents, was planning on spending the weekend repairing his car. On Friday, Nitai’s employer called and offered him $525 in overtime pay if he would agree to work over the weekend. Nitai could get his car repaired over the weekend at Autofix for $420. If Nitai works over the weekend, he will have to pay the $420 to have his car repaired, but he will earn $525. Assume Nitai’s marginal tax rate is 12 percent rate. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Problem 4-33 Part-a (Algo) a-1. Strictly considering tax factors, should Nitai work or repair his car if the $420 he must pay to have his car fixed is not deductible? Work Repair a-2. Given the answer in a-1 above, by how much is Nitai better or worse off?
Answer:
a-1. Strictly considering tax factors, should Nitai work or repair his car if the $420 he must pay to have his car fixed is not deductible?
Worka-2. Given the answer in a-1 above, by how much is Nitai better or worse off?
If Natia works during the weekend, he will have $42 more than if he repairs his car.Explanation:
additional revenue generated by working on weekend = $525 x (1 - 12%) = $462
cost of repairing the car at Autofix = $420
net benefit of working during the weekend = additional revenue - cost of repairing the car at Autofix = $462 - $420 = $42
Drying times for newly painted microwave oven cabinets are normally distributed with a mean of 2.5 minutes and a standard deviation of 0.25 minutes. After painting, each cabinet is mated with its electronic modules and mechanical components. The production manager must decide how much time to allow after painting before these other components are installed. If the time is too short, the paint will smudge and the unit will have to be refinished. If the time is too long, production efficiency will suffer. A consultant has concluded that the time delay should be just enough to allow 99.8% of the cabinets to dry completely, with just 0.2% ending up being smudged and sent back for refinishing. Given this information, for what time setting should the production manager set the automatic timer that pauses the production line while each cabinet dries?
Answer: 3.22
Explanation:
Given that;
mean = 2.5 min
standard deviation = 0.25 min
now to get the value of X required, we say
z = (x - u) / a
where z is the distance from the mean measured in the standard deviation units, x is the value we are interested in, u is the mean distribution, a is the standard deviation of the distribution.
the time delay should be just enough to allow 99.8% of the cabinets to dry completely = 99.8/100 = 0.9980
first we determine an appropriate z value.
Using the standardized normal tables,
value of z for approximately 0.9980 is 2.88
so using our initial equation z = (x - u) / a
we substitute the value
z = (x - u) / a
2.88 = ( x - 2.5) / 0.25
2.88 * 0.25 = x - 2.5
0.72 = x - 2.5
x = 0.72 + 2.5
x = 3.22
Match the association type with the person that best fits the description: personal association a. your parents b. the president of your gardening club c. the man you met while walking your dog d. your doctor
Answer:
A
Explanation:
edge 2021
You are planning to save for retirement over the next 30 years. To do this, you will invest $780 per month in a stock account and $380 per month in a bond account. The return of the stock account is expected to be 9.8 percent, and the bond account will earn 5.8 percent. When you retire, you will combine your money into an account with an annual return of 6.8 percent. Assume the returns are expressed as APRs. How much can you withdraw each month from your account assuming a 25-year withdrawal period
Answer:
The amount that can be withdrawn each month from your account assuming a 25-year withdrawal period is $14,278.02.
Explanation:
The total amount saved for 30 years after retirement can be estimated by employing the formula for calculating the future value (FV) of ordinary annuity for both stock and bond as follows:
Future Value of Stock
FVs = M * (((1 + r)^n - 1) / r) ................................. (1)
Where,
FVs = Future value of the amount invested in stock after 30 years =?
M = Monthly investment = $780
r = Monthly return rate = 9.8% / 12 = 0.098 / 12 = 0.00816666666666667
n = number of months = 30 years * 12 months = 360
Substituting the values into equation (1), we have:
FVs = $780 * (((1 + 0.00816666666666667)^360 - 1) / 0.00816666666666667)
FVs = $780 * 2,166.28572458476
FVs = $1,689,702.87
Future Value of Bond
FVb = M * (((1 + r)^n - 1) / r) ................................. (2)
Where,
FVb = Future value of the amount invested in bond after 30 years =?
M = Monthly investment = $380
r = Monthly interest rate = 5.8% / 12 = 0.058 / 12 = 0.00483333333333333
n = number of months = 30 years * 12 months = 360
Substituting the values into equation (2), we have:
FVb = $380 * (((1 + 0.00483333333333333)^360 - 1) / 0.00483333333333333)
FVb = $380 * 966.933721691683
FVb = $367,434.81
Calculation of the amount that can be withdrawn monthly for 25-year withdrawal period
This can be calculated by employing the formula for calculating the present value of an ordinary annuity as follows:
PV = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (3)
Where;
PV = Sum of present values of stock and bond investments after retirement = FVs + FVb = $1,689,702.87 + $367,434.81 = $2,057,137.68
P = Monthly withdrawal = ?
r = Monthly interest rate = APR / 12 = 6.8% ÷ 12 = 0.068 / 12 = 0.00566666666666667
n = number of months = 25 years * 12 months = 300
Substitute the values into equation (3) and solve for P, we have:
$2,057,137.68 = P * ((1 - (1 / (1 + 0.00566666666666667))^300) / 0.00566666666666667)
$2,057,137.68 = P * 144.077250670093
P = $2,057,137.68 / 144.077250670093
P = $14,278.02
Therefore, the amount that can be withdrawn each month from your account assuming a 25-year withdrawal period is $14,278.02.
Adjusting entries affect at least one balance sheet account and at least one income statement account. For the entries below, identify the account to be debited and the account to be credited. Indicate which of the accounts is the income statement account and which is the balance sheet account. Assume the company records prepayments of expenses in asset accounts, and cash receipts of unearned revenues in liability accounts. Entry to record service revenues performed but not yet billed (nor recorded). Entry to record janitorial expense incurred but not yet paid. Entry to record rent expense incurred but not yet paid. Entry to record interest expense incurred but not yet paid. Entry to record expiration of prepaid rent.
Answer:
Entry to record service revenues performed but not yet billed (nor recorded).
Dr Accounts receivable (asset, balance sheet)
Cr Service revenue (revenue, income statement)
Entry to record janitorial expense incurred but not yet paid.
Dr Janitorial expense (expenses, income statement)
Cr Janitorial expenses payable (liability, balance sheet)
Entry to record rent expense incurred but not yet paid.
Dr Rent expense (expenses, income statement)
Cr Rent expenses payable (liability, balance sheet)
Entry to record interest expense incurred but not yet paid.
Dr interest expense (expenses, income statement)
Cr Interest expenses payable (liability, balance sheet)
Entry to record expiration of prepaid rent.
Dr Rent expense (expenses, income statement)
Cr Prepaid rent (asset, balance sheet)
Answer:
the numbering
Explanation:
EDGU 2021
alculate the difference between the present value of $200 per year cash payments for the next 40 years and the present value of $200 per year cash payments in perpetuity. Assume in either case, the first payment occurs one year from today and that the appropriate discount rate is 8%/year. The difference in the present value of these two streams of future cash payments that you calculated equals the present value of cash payments over what period of time?
Answer:
Present value of annuity = PV(8%,40,-200,0,0)
Present value of annuity = $2,384.93
Present value of Perpetuity = 200/ 8%
Present value of Perpetuity = 200 / 0.08
Present value of Perpetuity = 2500
The difference between the Present value = $2,500 - $2,384.93 = $115.07
However, both does not equal as time value has to be considered.
Harrington Company uses predetermined overhead rates to apply manufacturing overhead to jobs. The predetermined overhead rate is based on machine-hours in the Machining Department and direct labor cost in the Assembly Department. At the beginning of the year, the company made the following estimates: Machining Assembly Direct labor hours 16,000 12,000 Direct labor cost$20,000 $15,000 Machine-hours5,000 1,000 Manufacturing overhead$25,000 $30,000 What predetermined overhead rates would be used in the Machining and Assembly Departments, respectively
Answer and Explanation:
The computation of the predetermined overhead rate for both the departments is shown below:
Predetermined overhead Rates for Machining Department
= $25,000 ÷ 5,000
= $5 per machine hour
And, Predetermined overhead Rates for Assembly Department
= $30,000 ÷ 15,000
= 200% of direct labor cost
Hence, the two are the above answers and the same is to be considered
Professional Headhunters, Inc. (PHI), is a job placement company that operates in the northeastern United States. During Year 1, the company earned $145,000 in revenue by providing services to customers. However, it collected only $120,000 of the revenue in cash. PHI expected to collect the remaining $25,000 in Year 2. In addition, PHI incurred $80,000 of expenses. However, by the end of Year 1, PHI had paid only $75,000 of the cash owed for expenses because it had not yet paid $5,000 to employees who had worked during Year 1 but had not been paid by the end of the year. PHI expected to pay the $5,000 in cash to the employees during Year 2. Based on this information alone, determine the amount of net income, total assets, and total liabilities PHI should report on its Year 1 financial statements.
Answer:
Professional Headhunters, Inc. (PHI)
i) Net Income = Revenue minus Expenses
= $145,000 - $80,000
= $65,000
ii) Total assets = Cash balance plus Accounts Receivable balance
= $45,000 + $25,000
= $70,000
iii) Total liabilities = Accounts payable
= $5,000
Explanation:
Earned Revenue = $145,000
Collection from customers = $120,000
Accounts receivable balance = $25,000
Expenses incurred = $80,000
Cash payment for expenses = $75,000
Accounts payable for expense = $5,000
Cash balance:
Collection from customers = $120,000
Cash payment for expenses = $75,000
Cash balance = $45,000
The purchase price of a natural gas-fired commercial boiler (capacity X) was $ eight years ago. Another boiler of the same basic design, except with capacity X, is currently being considered for purchase. If it is purchased, some optional features presently costing $ would be added for your application. If the cost index was for this type of equipment when the capacity X boiler was purchased and is now, and the applicable cost capacity factor is , what is your estimate of the purchase price for the new boiler?
Answer:
=352,931.20
Explanation:
Calculation for the estimate of the purchase price for the new boiler
Purchase price of new boiler = 181,000* (221 / 162) * (1.42)^0.8 + 28,000
Purchase price of new boiler =181,000*1.36*1.32+28,000
Purchase price of new boiler =32,4931.2+28,000
Purchase price of new boiler =352,931.20
Therefore the estimate of the purchase price for the new boiler will be 352,931.20
BD Corporation has purchased new computers to modernize the office. The increased efficiency from the computers will lead to increases in productivity from the office staff. Estimates of the additional revenue from the productivity are $75,000 per year (end of year) for the next five years when the computers will need to be replaced. The new computers will cost $300,000. You will have to borrow from your local bank at a rate of 8% APR. Should you go ahead with the new computers
Answer:
BD Corporation should not purchase the new computers
Explanation:
initial outlay year 0 = -$300,000
increased productivity per year = $75,000 for years 1-5
discount rate = 8%
NPV = -$300,000 + $75,000/1.08 + $75,000/1.08² + $75,000/1.08³ + $75,000/1.08⁴ + $75,000/1.08⁵ = -$300,000 + $69,444.44 + $64,300.41 + $59,537.42 + $55,127.24 + $51,043.74 = -$300,000 + 299,453.25 = -$546.75
since NPV is negative, then the project should be rejected
we can also use an annuity factor to determine the present value of this annuity, PV = $75,000 x 3.9927 = $299,452.50
NPV = -$300,000 + $299,452.50 = -$547.50
At December 31, 2019, Sheffield Corporation had the following stock outstanding.
10% cumulative preferred stock, $100 par, 109,304 shares $10,930,400
Common stock, $5 par, 4,070,540 shares 20,352,700
During 2020, Sheffield did not issue any additional common stock. The following also occurred during 2020.
Income from continuing operations before taxes $23,082,300
Discontinued operations (loss before taxes) $3,316,900
Preferred dividends declared $1,093,040
Common dividends declared $2,221,700
Effective tax rate 35 %
Compute earnings per share data as it should appear in the 2020 income statement of Sheffield Corporation. (Round answers to 2 decimal places, e.g. 1.48.)
Answer:
Explanation:
company produces a single product. Last year, fixed manufacturing overhead was $30,000, variable production costs were $48,000, fixed selling and administration costs were $20,000, and variable selling administrative expenses were $9,600. There was no beginning inventory. During the year, 3,000 units were produced and 2,400 units were sold at a price of $40 per unit. Under variable costing, net operating income would be: A. a profit of $6,000.B. a profit of $4,000.C. a loss of $2,000.D. a loss of $4,400.
Answer:
net operating income= (2,000)
Explanation:
First, we need to calculate the unitary variable production cost:
unitary variable production cost= 48,000/3,000= $16
Contribution margin income statement:
Sales= 2,400*40= 96,000
Variable cost= (2,400*16) + 9,600= (48,000)
Contribution margin= 48,000
Fixed manufacturing overhead= (30,000)
Fixed selling and administration costs= (20,000)
net operating income= (2,000)
An acquiring company issues 800,000 shares of $1.00 par value common stock to acquire 100% of the voting common stock of an investee company in a transaction that qualifies as a business combination. The fair value of the acquiring company’s common stock is $10.00 per share. Direct legal and consult-ing fees incurred pursuant to the combination are $200,000. Direct registration and issuance costs for the acquiring company’s common stock are $100,000. The transaction did not result in goodwill recog-nition or bargain gain recognition. What is the total amount of net assets recognized as a result of this business combination?
Answer: $8,000,000
Explanation:
The Acquiring company issued stock that is value at $10.00 each to be able to acquire 100% of the Investee company.
The total amount of net assets will therefore be the fair value of the stock that was issued to acquire the Investee company.
Net Assets = 800,000 * 10
= $8,000,000
The fields company has two manufacturing departments, forming and painting. The company uses the weight average method of process costing. At the beginning of the month, the forming department has 25,000 units in inventory, 60% complete as to materials 40% complete as to conversion cost. The beginning inventory cost of $60,100 consisted of $44,800 of direct material cost and $15,300 of conversion cost. During the month, the forming department started 300,000 units. At the end of the month,the forming department had 30,000 units in ending inventory, 80% complete as to materials and 30% complete as to conversion. Units completed in the forming department are transferred to the painting depatment. Cost information for the forming department is as follows:__________.Beginning work in process inventory $60.100Direct materials added during the month 1'231.200Conversion added during the month 896.7001. Calculate the equivalent units of production for the forming department.2. Calculate the cost per equivalent unit of production for forming department3. Using the weight average method, assign costs to the forming department's output - specifically, its units transferred to painting and its ending work in process inventory.
Answer:
Equivalent Units Materials 315,000 Conversion 310,000
Cost PEr EUP Materials =$ 4.0507 Conversion= $ 28.975
Ending Work In Process Costs = $ 357993.28
Units Transferred Costs = $ 9376,818.4
Explanation:
Particulars Units % of Completion Equivalent Units
Materials Conversion Materials Conversion
BWIP 25,000 60% 40% 15000 10000
+Units started 300,000 300,000 300,000
Equivalent Units 315,000 310,000
Costs Materials Conversion
Beginning work in process inventory $44,800 $15,300
Added during the month 1'231,200 896,7001
Total Costs 1276,000 898 2301
EUP 315,000 310,000
Cost PEr EUP 1276,000 / 315,000 898 2301/310,000
=$ 4.0507 = $ 28.975
Ending Work In Process Costs = $ 357993.28
Materials (30,000* 80% ) = 24000*$ 4.0507= $ 97216.8
Conversion (30,000* 30%) = 9000*$ 28.975= $ 260,776.48
Multiplying it with the EUP to get the costs.
Units Transferred Costs = $ 9376,818.4
Materials (315,000 -30,000 ) = 312000*$ 4.0507= $ 1263,818.4
Conversion (310,000-30,000) = 280,000*$ 28.975= $ 8113,000
In weighted average methhod the number of equivalent units is obtained by adding the ending inventory to the units transferred or the BWIP inv to the units started.
BP had a group-wide corporate system to evaluate risk, introduced by Hayward. Why did this not predict the Deepwater Horizon Disaster?
Answer: High Complexity of the Drilling operation
Explanation:
The Deepwater Horizon disaster was the largest oil spillage in the history of maritime oil disasters and happened in April 2010 in the Gulf of Mexico on a BP oil project.
Normally, Oil Companies have plans that are meant to evaluate the risk of such events such that they can be avoided and indeed BP did have one which was introduced by its CEO Tony Hayward but this failed to predict the Deep Water Horizon for the simple reason that the project was too complex for it.
With so many things involved in the project, the system was not adequately prepared to handle the risk of failure from such complex structures such as the Deepwater Horizon rig which meant that BP were simply not prepared for the spill when it happened and this led to allegations that BP was not a safety-conscious company.
The corporate system that was used to evaluate risk at BP was not able to predict the Deepwater Horizon disaster for the primary reason that the system was rendered useless in the face of high degree of complexity that BP’s oil drilling operations in Gulf of Mexico faced. Due to the high degree of risk all the participating parties lost hold of sight over the risk analysis process that was put in place by the company.
The complexity of the system led to the undermining and failure of the corporate system to evaluate risk. BP tried to shift the weight of the blame to Transocean Company, but in fact it was BP itself that failed to foresee this event.
perior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses $ 211,000 Purchases of raw materials $ 269,000 Direct labor ? Administrative expenses $ 154,000 Manufacturing overhead applied to work in process $ 378,000 Actual manufacturing overhead cost $ 359,000 Inventory balances at the beginning and end of the year were as follows: Beginning Ending Raw materials $ 53,000 $ 34,000 Work in process ? $ 28,000 Finished goods $ 33,000 ? The total manufacturing costs added to production for the year were $680,000; the cost of goods available for sale totaled $730,000; the unadjusted cost of goods sold totaled $668,000; and the net operating income was $36,000. The company’s underapplied or overapplied overhead is closed to Cost of Goods Sold. Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)
Answer:
Direct labor = $14,000
Beginning Work in process = $45,000
Ending Finished goods = $62,000
Explanation:
Note: See the attached excel file for the schedules of cost of goods manufactured and cost of goods sold and an income statement.
Also note: The following workings are used in the excel file:
Workings:
w.1: Direct labor = Total manufacturing costs for the year - Total raw materials used in production - Manufacturing overhead applied to work in process = $680,000 - $288,000 - $378,000 = $14,000
w.2: Cost of goods manufactured = Cost of goods available for sale - Beginning finished goods = $730,000 - $33,000 = $697,000
w.3: Total cost of work in process = Cost of goods manufactured + Ending work in process = $697,000 + $28,000 = $725,000
w.4: Beginning work in process = Total cost of work in process - Total manufacturing cost = $725,000 - $680,000 = $45,000
w.5: Ending finished goods = Cost of goods available for sale - Unadjusted cost of goods sold = $730,000 - $668,000 = $62,000
w.6: Overapplied overhead = Manufacturing overhead applied to work in process - Actual manufacturing overhead cost = $378,000 - $359,000 = $19,000
w.7: Gross profit = Net operating income + Selling expenses + Administrative expenses = $36,000 + $211,000 + $154,000 = $401,000
w.8: Sales = Adjusted cost of goods sold + Gross profit = $687,000 + $401,000 = $1,088,000
ynwood, Inc. produces two different products (Product A and Product X) using two different activities: Machining, which uses machine hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The activity rate for Machining is $150 per machine hour, and the activity rate for Inspection is $560 per batch. The activity drivers are used as follows: Product A Product X Total Machine hours 1,800 3,000 4,800 Number of batches 53 21 74 What is the amount of Machining cost assigned to Product A
Answer:
$270,000
Explanation:
Calculation for the amount of Machining cost assigned to Product A
Using this formula
Machine cost=Machine hours*Activity rate
Let plug in the formula
Machine cost=1,800*$150
Machine cost =$270,000
Therefore the amount of Machining cost assigned to Product A will be $270,000
In spring of this year, Parmac Engineering Company signed a $480 million contract with the city of Parkersburg, to construct a new city hall. Parmac expects to construct the building within two years and incur expenses of $360 million. The city of Parkersburg paid $120 million when the contract was signed, $240 million within the next six months, and the final $120 million exactly one year from the signing of the contract. Parmac incurred $144 million in costs during the year and the rest in the following year to complete the contract on time. Using the cost-to-cost method how much revenue should Parmac recognize in the current year
Answer:
$192,000 million
Explanation:
Calculation for how much revenue should Parmac recognize in the current year
First step is to find the percentage of completion using this formula
Percentage of completion=Cost incurred/Total expected cost
Let plug in the formula
Percentage of completion=$144 million/$360 million
Percentage of completion=0.4*100
Percentage of completion=40%
Last step is to find the revenue recognized using this formula
Revenue recognized=Total contract *Percentage of completion
Let plug in the formula
Revenue recognized=$480 million*40%
Revenue recognized=$192,000 million
Therefore the amount of revenue that Parmac should recognize in the current year will be $192,000 million
In May of 2021, Raymond Financial Services became involved in a penalty dispute with the EPA. At December 31, 2021, the environmental attorney for Raymond indicated that an unfavorable outcome to the dispute was probable. The additional penalties were estimated to be $777,000 but could be as high as $1,184,000. After the year-end, but before the 2021 financial statements were issued, Raymond accepted an EPA settlement offer of $914,000. Raymond should have reported an accrued liability on its December 31, 2021, balance sheet of: Multiple Choice $270,000. $914,000. $777,000. $1,184,000.
Answer:
$914,000
Explanation:
Based on the information given we were told that Raymond accepted an EPA which is fully known as Environmental Protection Agency settlement offer of the amount of $914,000 which means that the amount that Raymond should have reported as the ACCRUED LIABILITY on its December 31, 2021, balance sheet should have been EPA settlement offer of the amount of $914,000.
RATIO CALCULATIONS Assume the following relationships for the Caulder Corp.: Sales/Total assets 1.7x Return on assets (ROA) 7% Return on equity (ROE) 13% Calculate Caulder's profit margin assuming the firm uses only debt and common equity, so total assets equal total invested capital. Round your answer to two decimal places. % Calculate Caulder's debt-to-capital ratio assuming the firm uses only debt and common equity, so total assets equal total invested capital. Round your answer to two decimal places.
Answer:
4.12%46.15%Explanation:
1. The Return on Assets can be calculated by;
Return on assets = Profit margin * Assets turnover
So,
Profit Margin = Return on Assets/ Assets Turnover
= 7%/1.7
= 4.12%
2. The amount of debt in the company is the capital less equity and the Percent of Equity in the company is;
= Return on Assets / Return on Equity
= 7% / 13%
= 53.85%
Debt - to - Capital = 1 - 53.85%
= 46.15%
The first year of operations for a company was Year 1. The net income for Year 1 was $21,200 and dividends of $12,600 were paid. In Year 2, the company reported net income of $35,200 and paid dividends of $5,600. At the end of Year 1, the company had total assets of $162,000. At the end of Year 2, the company had total assets of $ $252,000.What was the amount of retained earnings at the end of Year 1?
Answer:
$8,600
Explanation:
The net income year 1 was $21,200
The dividend paid in year 1 was $12,600
Therefore the retained earnings at the end of year 1 can be calculated as follows
= beginning retained earnings + net income - Dividend
= $0 + $21,200-$12,600
= $21,200 - $12,600
= $8,600
Hence the retained earnings at the end of year 1 is $8,600
