Assume that Simple Co. had credit sales of $280,000 and cost of goods sold of $165,000 for the period. It estimates that 2 percent of credit sales in uncollectible accounts when it uses the percentage of credit sales method and it estimates that the appropriate ending balance in the Allowance for Doubtful Accounts is $6,900 when it uses the aging method. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $400.

Required:
Prepare the journal entry to record the end-of-period adjustment for bad debts under the (a) percentage of credit sales method and (b) aging of accounts receivable method.

Answer:

A. Dr Bad Debt Expense $5,600

Cr Allowance for Doubtful Accounts $5,600

B. Dr Bad Debt Expense $6,500

Cr Allowance for Doubtful Accounts $6,500

Explanation:

A. Preparation of the journal entry to record the end-of-period adjustment for bad debts under

percentage of credit sales method

Dr Bad Debt Expense $5,600

Cr Allowance for Doubtful Accounts $5,600

($280,000 x .02 = 5600)

(Being to record bad debts under percentage of credit sales method)

B. Preparation of the journal entry to record the end-of-period adjustment for bad debts under the aging of accounts receivable method.

Dr Bad Debt Expense $6,500

Cr Allowance for Doubtful Accounts $6,500

($6,900 - $400 = 6500)

Cheong Automobile Company fabricates automobiles. Each vehicle includes one water pump, which is currently made in-house. Details of the water pump assembly are as follows: Volume 1200 units per month Variable cost per unit $11.50 per unit Fixed costs $10,000 per month An Indonesian factory has offered to supply Cheong Automobile Company with ready-made units for a cost of $16 for each water pump. Assume that Cheong's fixed costs are unavoidable and that Cheong will not be able to use the excess capacity in any profitable manner. If Cheong decides to outsource, monthly operating income will ___

Ten cavemen with a remaining average life expectancy of 10 years use a path from their cave to a spring some distance away. The path is not easily traveled due to 100 large stones that could be removed. The annual benefit to each individual if the stones were removed is $8.25. Each stone can be removed at a cost of $2.50. The interest rate is 2 %.

Required:
a. Compute the benefit/cost ratio for the individual if he alone removed the 100 stones.
b. Compute the benefit/cost ratio for the individual if the task was undertaken collectively, with each individual removing 10 stones.
c. What maximum amount may be charged by a manager who organizes the group effort if the minimum acceptable benefit/cost ratio is 2?

Inside the packaging of a new bread machine she purchases, Ginger finds a paper stating, "All our products will be replaced within the first year if they fail to operate correctly. However, consumer misuse or abuse will effectively end this policy." This is a(n) a. implied warranty. b. express warranty. c. statement of guarantee. d. set of instructions for use. e. labe

You are considering a stock investment in one of two firms (NoEquity, Inc. and NoDebt, Inc.), both of which operate in the same industry and have identical operating income of $23.5 million. NoEquity, Inc. finances its $70 million in assets with $69 million in debt (on which it pays 10 percent interest annually) and $1 million in equity. NoDebt, Inc. finances its $70 million in assets with no debt and $70 million in equity. Both firms pay a tax rate of 30 percent on their taxable income.

Required:
Calculate the net income and return on assets for the two firms.

Clayborn Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on May 31, its Cash account shows a debit balance of $21,525. Clayborn's May bank statement shows $19,400 on deposit in the bank. Determine the adjusted cash balance using the following information:
Deposit in transit $6,550
Outstanding checks $5,500
Bank service fees, not yet recorded by company $70
A NSF check from a customer, not yet recorded by the company $1,005
The adjusted cash balance should be:

Consider a 20-year callable annual coupon bond with a face value of $1000 and a coupon rate of 8%. The bonds can be called after 5 years for a price of $1070 and is currently selling in the market for $1145. Calculate the yield to call. 6.67% 8.77% 6.21% 8.15% 5.81%

Geraths Windows manufactures and sells custom storm windows for three-season porches. Geraths also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be performed by other vendors. Geraths enters into the following contract on July 1, 2020, with a local homeowner. The customer purchases windows for a price of $2,400 and chooses Geraths to do the installation. Geraths charges the same price for the windows irrespective of whether it does the installation or not. The customer pays Geraths $2,000 (which equals the standalone selling price of the windows, which have a cost of $1,100) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on September 1, 2020, Geraths completes installation on October 15, 2020, and the customer pays the balance due.

Required:
Prepare the journal entries for Geraths in 2020.

ABC purchased equipment for $60,000 on January 1, 2018. The equipment is expected to have a five-year life, with a residual value of $5,000 at the end of five years. Using the straight-line method, depreciation expense for 2019 and the book value at December 31, 2019 would be:

Perry Investments bought 2,000 shares of Able, Inc. common stock on January 1, 20X1, for $20,000 and 2,000 shares of Baker, Inc. common stock on July 1, 20X1 for $24,000. Baker paid $2,400 of previously declared dividends to Perry on December 31, 20X1. At the end of 20X1, the fair value of the Able stock was $18,000 and the fair value of the Baker stock was $28,000. The stocks were purchased for short-term speculation prior to the effective date of the change in accounting rules for equity investments. Perry owns 10% of each company.

Perry should record the receipt of the Baker dividend as:______

a. DR Cash 2,400 CR Investment in Baker 2,400
b. DR Cash 240 CR Dividend income 240
c. DR Cash 2,400 CR Dividends receivable 2,400
d. DR Dividends receivable 2,400 CR Dividend income 2,400

g You have been hired to value a new 25-year callable, convertible bond with a par value of $1,000. The bond has a coupon rate of 6 percent, payable annually. The conversion price is $180 and the stock currently sells for $42.10. The stock price is expected to grow at 10 percent per year. The bond is callable at $1,200; but based on prior experience, it won't be called unless the conversion value is $1,300. The required return on this bond is 8 percent. What value would you assign to this bond

Gotham University offers only high-tech graduate-level programs. Gotham has two principal operating departments, Engineering and Computer Sciences, and two support departments, Facility and Technology Maintenance and Enrollment Services. The base used to allocate facility and technology maintenance is budgeted total maintenance hours. The base used to allocate enrollment services is number of credit hours for a department. The Facility and Technology Maintenance budget is $350,000, while the Enrollment Services budget is $950,000. The following chart summarizes budgeted amounts and allocation-base amounts used by each department:

Budget Engineering Computer Sciences F&T Maintenance Enrollment Service
F&T Maintenance hours $350,000 2,000 5,000 zero 1,000
Enrollment Service hours $950,000 24,000 36,000 2,000 zero

Required:
Prepare a schedule showing the support costs allocated to each department.

Absorption Costing Income Statement
On October 31, the end of the first month of operations, Maryville Equipment Company prepared the following income statement, based on the variable costing concept:
Maryville Equipment Company
Variable Costing Income Statement
For the Month Ended October 31
Sales (220,000 units) $7,920,000
Variable cost of goods sold:
Variable cost of goods manufactured$6,360,000
Inventory, October 31 (45,000 units)(1,080,000)
Total variable cost of goods sold (5,280,000)
Manufacturing margin $2,640,000
Variable selling and administrative expenses (330,000)
Contribution margin $2,310,000
Fixed costs:
Fixed manufacturing costs$530,000
Fixed selling and administrative expenses100,000
Total fixed costs (630,000)
Operating income $1,680,000
Prepare an income statement under absorption costing.
Maryville Equipment Company
Absorption Costing Income Statement
For the Month Ended October 31
Cost of goods sold:

The Sanding Department of Quik Furniture Company has the following production and manufacturing cost data for March 2017, the first month of operation. Production: 9,510 units started which is comprised of 6,510 units finished and transferred out and 3,000 units started that are 100% complete as to materials and 20% complete as to conversion costs. Manufacturing costs: Materials $35,948; labor $21,400; overhead $34,840.
Prepare a production cost report. (Round unit costs to 2 decimal places, e.g. 2.25.)
QUIK FURNITURE COMPANY
Sanding Department
Production Cost Report
For the Month Ended March 31, 2017
Equivalent Units Physical Units Conversion Costs Quantities Units to be accounted for Materials Work in process, March 1 Started into production Total units Units accounted for Transferred out Work in process, March 31 Total units
Conversion Costs Total Costs Unit costs Materials Total Costs Equivalent units Unit costs Costs to be accounted for Work in process, March 1 Started into production Total costs Cost Reconciliation Schedule Costs accounted for Transferred out Work in process, March 31 Materials Conversion costs Total costs

Indicate the correct statement about the effect of the Reynolds number on the character of the flow over an object. If the Reynolds number is low enough, then the effect of viscosity is so:___.
a. high that there is a region near the plate where the fluid is stationary.
b. increases, then the size of the region around the object that is affected by viscosity increases.
c. is high enough, then the effect of viscosity is negligible and the fluid flows over the plate without sticking to the surface.
d. increases, then the extent of the region around the object that is affected by viscosity decreases.

A salesgirl gets$20.00 for every$100.00 of bread she sells.In one month she sells 50 large loaves of bread at$12.00 each and 80 small loaves at$5.00 each.
Calculate her commission.​

One of the three basic coordination tasks an economy has to face is . In a free-market system, the preceding question is answered by: The price mechanism Input-output analysis Central planning

Both __________ and __________ affect the awareness and motivation of a firm to undertake actions and responses. a. first-mover advantages; corporate size b. market commonality; resource similarity c. management capabilities; competitive analysis d. speed of management decisions; management actions

Lake Corp., a newly organized company, reported pre-tax financial income of $100,000 for Year 1. Among the items reported in Lake's Year 1 income statement are the following: Premium on officer's life insurance with Lake as owner and beneficiary $15,000 Interest received on municipal bonds 20,000 The enacted tax rate for Year 1 is 30% and 25% thereafter. In its December 31, Year 1 balance sheet, Lake should report a deferred income tax liability of

What is a planned economy regulated by?

4. Suppose GDP is $15 million, private saving is $3 million, consumption is $8 million, public saving is $2 million. Assume the economy is closed.

(a) Calculate taxes minus transfer payments (T), government purchases (G), national saving (S), and investment (I).

(b) Is the government running a deficit or a surplus.? Explain

define federal reserve system.​

Select the correct answer.
Athletes can have short playing careers, so they are eager to leverage their fame through endorsements as much as possible. What is the risk of such an approach?
A.
There’s saturation of the market with multiple endorsements.
B.
Only certain companies will be interested.
C.
Consumers will start to lose interest.
D.
Their perceived endorsement value will be low.

QUESTION 10

Branch Corp.'s total assets at the end of last year were $315,000 and its net income after taxes was $22,750. What was its return on total assets?
a.
7.22%
b.
8.78%
c.
7.96%
d.
8.36%
e.
7.58%

Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of hospitals. In the face of declining profits, Med Max decided to implement an activity-based costing system to improve its understanding of the costs incurred to serve each hospital. The company broke its selling and administrative expenses into four activities as shown below:

Activity Cost Pool (Activity Measure) Total Cost Total Activity
Customer deliveries (Number of deliveries) $630,000 7,000 deliveries
Manual order processing (Number of manual orders) 444,000 6,000 orders
Electronic order processing (Number of electronic orders) 231,000 11,000 orders
Line item picking (Number of line items picked) 955,500 490,000 line items
Other organization-sustaining costs (None) 610,000
Total selling and administrative expenses $2,870,500

Med Max gathered the data below for two of the many hospitals that it serves—City General and County General:


Activity
Activity Measure General City County General
Number of deliveries 10 20
Number of manual orders 0 40
Number of electronic orders 10 0
Number of line items picked 120 280

Required:
a. Compute the activity rate for each activity cost pool.
b. Compute the total activity costs that would be assigned to City General and County General.

List two reasons why someone looking at a career in the Energy cluster might want to focus on new technology, such as energy-efficient products or sustainable energy. Give two examples of careers that may work with these new energy technologies.

Which of the following industries is most likely to outsource jobs to another country because of slight increases in labor costs?

a. Milk dairy.
b. High-tech research facility.
c. Textile plant.
d. Automobile assembly plant.

Cynthia, a sole proprietor, was engaged in a service business and reported her income on the cash basis. On February 1, 2013, she incorporates her business as Dove Corporation and transfers the assets of the business to the corporation in return for all of the stock in addition to the corporation’s assumption of her proprietorship’s liabilities. All of the receivables and the unpaid trade payables are transferred to the newly formed corporation. The balance sheet of the corporation immediately after its formation is as follows:
Dove Corporation
Balance Sheet
February 1, 2013
Assets
Basis to Dove Fair Market Value
Cash $ 80,000 $ 80,000
Accounts receivable 0 240,000
Equipment (cost $180,000; 120,000 320,000
depreciation previously claimed $60,000)
Building (straight-line depreciation) 160,000 400,000
Land 40,000 160,000
Total $400,000 $1,200,000
Liabilities and Stockholder’s Equity
Liabilities:
Accounts payable—trade $ 120,000
Notes payable—bank 360,000
Stockholder’s equity:
Common stock 720,000
Total $1,200,000
Discuss the tax consequences of the incorporation of the business to Cynthia and to Dove Corporation.

Diamond Company has three product lines, A, B, and C. The following financial information is available:

Item Product Line A Product Line B Product Line C
Sales $70,000 $145,000 $32,000
Variable costs $42,000 $77,000 $20,000
Contribution margin $28,000 $68,000 $12,000
Fixed costs:
Avoidable $6,300 $19,000 $8,950
Unavoidable $5,000 $14,500 $4,000
Pre-tax operating
income $16,700 $34,500 $(-950 )

Assuming that Product Line C is discontinued and the manufacturing space formerly devoted to this line is rented for $6,000 per year, operating income for the company will likely:

a. Increase by $7,200.
b. Increase by $3,300.
c. Increase by some other amount.

Rainey Company's true cash balance at October 31 is $4,700. The following information is available for the bank reconciliation: Outstanding checks, $740 Deposits in transit, $540 Bank service charges, $110 The bank had collected an account receivable for Rainey Company, $1,200 The bank statement included an NSF check written by one of Ramsey's customers for $720. What was the unadjusted book balance at October 31

The sensitivity of a system for disciplining and possibly terminating employees is important, and it is critical that the system be seen as fair. Employees form conclusions about the system's fairness based on the system's outcomes and procedures and the way managers treat employees when carrying out those procedures. Three principles of justice are outcome fairness, procedural justice, and interactional justice.
Outcome fairness involves the ends of a discipline process or action, while procedural and interactional justice focus on the means to those ends. Not only is behavior ethical that is in accord with these principles, but research has also linked the last two categories of justice with employee satisfaction and productivity
Place each of the following labels in one of the columns.
Listen closely
College buddies
Project work
Family friendly
Explanations
Family relations
Accommodations
Gender benefits
Team raises
Promotion
Respect
Qualifications
Outcome fairness Procedural justice International justice