ACCT2020 In the month of November, Hickcox Company Inc. wrote checks in the amount of $9,750 (A+)

(ACCT2020) In the month of November, Hickcox Company Inc. wrote checks in the amount of $9,750. In December, checks in the amount of $11,880 were written. In November, $8,800 of these checks were presented to the bank for payment, and $10,889 in December.

Requirement:

1 What is the amount of outstanding checks at the end of November?

2 At he end of December

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ACCT2020 The internal control procedures in Payton Company make the following provisions (A+)

(ACCT2020) The internal control procedures in Payton Company make the following provisions. Match the principles of internal control with processes that are being followed in each case.

Independent internal verification

Documentation procedures

Segregation of duties

1. Employees who have physical custody of assets do not have access to the accounting records.

2. A prenumbered shipping document is prepared for each shipment of goods to customers.

3. Each month the assets on hand are compared to the accounting records by an internal auditor.

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ACCT2020 Match each situation with the fraud triangle factor (opportunity, financial pressure, or rationalization) that best describes it (A+)

(ACCT2020) Match each situation with the fraud triangle factor (opportunity, financial pressure, or rationalization) that best describes it.

An employee\’s monthly credit card payments are nearly 75% of their monthly earnings.

An employee earns minimum wage at a firm that has reported record earnings for each of the last five years.

An employee has an expensive gambling habit.

An employee has check writing and signing responsibilities for a small company, and is also responsible for reconciling the bank account.

1. Opportunity

2. Financial pressure

3. Rationalization

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The Post Division of the M.T. Woodhead Company (A+)

The Post Division of the M.T. Woodhead Company produces basic posts which can be sold to outside customers or sold to the Lamp Division of the M.T. Woodhead Company. Last year the Lamp Division bought all of its 30,800 posts from Post at $1.85 each. The following data are available for last year\’s activities of the Post Division:

Capacity in units 310,000 posts

Selling price per cost to outside customers $2.08

Variable costs per post $1.34

Fixed costs, total $162,000

The total fixed costs would be the same for all the alternatives considered below. Suppose the transfers of posts to the Lamp Division cut into sales to outside customers by 19,500 units. What is the lowest transfer price that would not reduce the profits of the Post Division?

1. $2.08

2. $1.34

3. $1.81

4. $1.79

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Division X makes a part with the following characteristics (A+)

Division X makes a part with the following characteristics:

Production capacity 33,500 units

Selling price to outside customers $23

Variable cost per unit $17

Fixed cost, total $100,400

Division Y of the same company would like to purchase 14,300 units each period from Division X. Division Y now purchases the part from an outside supplier at a price of $19 each.

Suppose Division X has ample excess capacity to handle all of Division Y\’s needs without any increase in fixed costs and without cutting into sales to outside customers. If Division X refuses to accept the $19 price internally and Division Y continues to buy from the outside supplier, the company as a whole will be:

1. worse off by $85,800 each period.
2. worse off by $28,600 each period.
3. better off by $57,200 each period.
4. worse off by $114,400 each period.

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Financial data for Windsor, Inc. for last year appear below (A+)

Financial data for Windsor, Inc. for last year appear below:

Windsor, Inc.

Statements of Financial Position

Beginning Ending

Balance Balance

Assets:

Cash $295,000 $336,524

Accounts receivable 178,000 180,000

Inventory 275,000 222,000

Plant and equipment (net) 480,000 441,000

Investment in Pine Company 306,000 322,000

Land (undeveloped) 273,000 273,000

Total assets $1,807,000 $1,774,524

Liabilities and owners’ equity:

Accounts payable $224,000 $197,000

Long-term debt 824,000 824,000

Owners’ equity 759,000 753,524

Total liabilities and owners’ equity $1,807,000 $1,774,524

Windsor, Inc.

Income statement

Sales $2,480,000

Less operating expenses 2,033,600

Net operating income 446,400

Less interest and taxes:

Interest expense $99,100

Tax expense 151,776 250,876

Net income $195,524

The company paid dividends of $201,000 last year. The \”Investment in Pine Company\” on the statement of financial position represents an investment in the stock of another company.

Required:

a. Compute the company\’s margin, turnover, and return on investment for last year.

b. The Board of Directors of Windsor, Inc. has set a minimum required return of 34%. What was the company\’s residual income last year?

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2. Marple Associates is a consulting firm that specializes in information systems for construction and landscaping companies (A+)

Marple Associates is a consulting firm that specializes in information systems for construction and landscaping companies. The firm has two offices—one in Houston and one in Dallas. The firm classifies the direct costs of consulting jobs as variable costs.

Assume that Dallas’ sales by major market are as follows:

Market

Dallas ConstructionClients LandscapingClients

Sales $ 870,000 100% $580,000 100% $290,000 100%

Variable expenses 522,000 60 377,000 65 145,000 50

Contribution margin 348,000 40 203,000 35 145,000 50

Traceable fixed expenses 104,400 12 29,000 5 75,400 26

Market segment margin 243,600 28 $174,000 30% $69,600 24%

Common fixed expenses not

traceable to markets 26,100 3 Office segment margin $ 217,500 25%

The company would like to initiate an intensive advertising campaign in one of the two markets during the next month. The campaign would cost $11,600. Marketing studies indicate that such a campaign would increase sales in the construction market by $101,500 or increase sales in the landscaping market by $87,000.

Required:

1a. Calculate the increased segment margin.

1b. In which of the markets would you recommend that the company focus its advertising campaign?

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Following are selected transactions Deshawn Company for 2010 (A+)

Following are selected transactions Deshawn Company for 2010.

Dec. 13 Accepted a $10,000, 45-day, 8% note dated December 13 in granting Latisha Clark a time extension on her past-due account receivable.

31 Prepared an adjusting entry to record the accrued interest on the Clark note.

Required:

Prepare journal entries for the above transactions. (Use a 360-day year for interest calculation.

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Following are selected transactions for Eduardo Company (A+)

Following are selected transactions for Eduardo Company.

Nov. 1 Accepted a $5,000, 180-day, 6% note dated November 1 from Melosa Allen in granting a time extension on her past-due account receivable.

Dec. 31 Adjusted the year-end accounts for the accrued interest earned on the Allen note.

Apr. 30 Allen honors her note when presented for payment; February has 28 days for the current year.

Required:

Prepare journal entries to record the above transactions. (Use a 360-day year for interest calculation. Do not round intermediate calculations and round your final answers to nearest dollar amount.

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At December 31, GreenTea Company reports the following results for its calendar-year (A+)

At December 31, GreenTea Company reports the following results for its calendar-year.

Cash sales $1,200,000

Credit sales 900,000

Its year-end unadjusted trial balance includes the following items.

Accounts receivable $195,000 debit

Allowance for doubtful accounts 3,000 debit

Required:

a. Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 1.5% of credit sales.

b. Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 0.5% of total sales.

c. Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 6% of year-end accounts receivable.

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