ACCT 2301 Using your accounting knowledge, find the missing amounts in the following separate income statements a through e. (A+)

ACCT 2301 Using your accounting knowledge, find the missing amounts in the following separate income statements a through e. (Amounts to be deducted should be indicated with a minus sign. Omit the \”$\” sign in your response.)

a b c d e

Sales $60,000 $42,500 $36,000 $ $23,600

Cost of goods sold Merchandise inventory (beginning)6,000 17,050 7,500 7,000 2,560

Total cost of merchandise purchases36,000 32,000 5,600

Merchandise inventory (ending) (2,700 ) (9,000 ) (6,600 )

Cost of goods sold 34,050 15,900 5,600 Gross profit 3,750 45,600

Expenses 9,000 10,650 12,150 2,600 6,000

Net income (loss) $ $15,950 $(8,400) $43,000 $

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4. The following information is available for Wonderway, Inc., for 2010 (A+)

The following information is available for Wonderway, Inc., for 2010.

Factory rent $28,800

Company advertising 19,400

Wages paid to laborers 83,600

Depreciation for president\’s vehicle 8,140

Indirect production labor 1,860

Utilities for factory 30,100

Production supervisor salary 31,600

President\’s salary 61,400

Direct materials used 35,400

Sales commissions 7,620

Factory insurance 12,200

Depreciation on factory equipment 26,600

Required:

a. Calculate the direct labor cost for Wonderway.

b. Calculate the manufacturing overhead cost for Wonderway.

c. Calculate the prime cost for Wonderway.

d. Calculate the conversion cost for Wonderway.

e. Calculate the total manufacturing costs for Wonderway.

f. Calculate the period expenses for Wonderway.

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Soprano Co. is in the process of preparing the second quarter budget for 2010, and the following data have been assembled (A+)

Soprano Co. is in the process of preparing the second quarter budget for 2010, and the following data have been assembled:

• The company sells a single product at a selling price of $44 per unit. The estimated sales volume for the next six months is as follows:

March 6,300 units June 8,200 units

April 7,500 units July 9,500 units

May 10,400 units August 6,000 units

• All sales are on account. The company\’s collection experience has been that 40% of a month\’s sales are collected in the month of sale, 53% are collected in the month following the sale, and 7% are uncollectible. It is expected that the net realizable value of accounts receivable (i.e., accounts receivable less allowance for uncollectible accounts) will be $146,916 on March 31, 2010.

• Management\’s policy is to maintain ending finished goods inventory each month at a level equal to 50% of the next month\’s budgeted sales. The finished goods inventory on March 31, 2010, is expected to be 3,750 units.

• To make one unit of finished product, 3 pounds of materials are required. Management\’s policy is to have enough materials on hand at the end of each month to equal 43% of the next month\’s estimated usage. The raw materials inventory is expected to be 11,546 pounds on March 31, 2010.

• The cost per pound of raw material is $5.00, and 71% of all purchases are paid for in the month of purchase; the remainder is paid in the following month. The accounts payable balance for raw material purchases is expected to be $33,850 on March 31, 2010.

Required:

(a) Prepare a sales budget in units and dollars, by month and in total, for the second quarter (April, May, and June) of 2010

(b) Prepare a schedule of cash collections from sales, by month and in total, for the second quarter of 2010.

(c) Prepare a production budget in units, by month and in total, for the second quarter of 2010.

(d) Prepare a materials purchases budget in pounds, by month and in total, for the second quarter of 2010

(e) Prepare a schedule of cash payments for materials, by month and in total, for the second quarter of 2010.

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Following are the budgeted income statements for the second quarter of 2010 for Marine Tech, Inc (A+)

Following are the budgeted income statements for the second quarter of 2010 for Marine Tech, Inc.:

April May June

Sales $266,000 $323,000 $361,000

Cost of goods sold* 182,400 216,600 239,400

Gross profit $83,600 $106,400 $121,600

Operating expenses† 41,800 47,500 51,300

Operating income $41,800 $58,900 $70,300

* Includes all product costs (i.e., direct materials, direct labor, and manufacturing overhead).

† Includes all period costs (i.e., selling, general, and administrative expenses).

The company expects about 30% of sales to be cash transactions. Of sales on account, 60% are expected to be collected in the first month after the sale is made, and 40% are expected to be collected in the second month after sale. Depreciation, insurance, and property taxes represent $22,800 of the estimated monthly cost of goods sold and $15,200 of the estimated monthly operating expenses. The annual insurance premium is paid in January, and the annual property taxes are paid in August. Of the remainder of the cost of goods sold and operating expenses, 80% are expected to be paid in the month in which they are incurred, and the balance is expected to be paid in the following month.

Current assets as of April 1, 2010, consist of cash of $26,600 and accounts receivable of $284,620 ($199,234 from March credit sales and $85,386 from February credit sales). Current liabilities as of April 1 consist of $34,200 of accounts payable for product costs incurred in March; $8,740 of accrued liabilities for operating expenses incurred in March; and a $76,000, 14%, 120-day note payable that is due on April 17, 2010.

An estimated income tax payment of $76,000 will be made in May. The regular quarterly dividend of $30,400 is expected to be declared in May and paid in June. Capital expenditures amounting to $32,680 will be made in April.

Required:

(a) Complete the monthly cash budgets for the second quarter of 2010 using the following format. Note that the ending cash balance for June is provided as a check figure. (Input all amounts as positive values. Use 360 days year for calculations.

(b) Assume that management of Marine Tech, Inc., desires to maintain a minimum cash balance of $18,100 at the beginning of each month and has arranged a $100,000 line of credit with a local bank at an interest rate of 10% to ensure the availability of funds. Borrowing transactions are to occur only at the end of months in which the budgeted cash balance would otherwise fall short of the $18,100 minimum balance. Repayments of principal and interest are to occur at the end of the earliest month in which sufficient funds are expected to be available for repayment. (Input all amounts as positive values. Use 360 days year for calculations

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Brass Creations Co. makes decorative candle pedestals (A+)

Brass Creations Co. makes decorative candle pedestals. An industrial engineer consultant developed ideal time standards for one unit of the Cambridge model pedestal. The standards follow, along with the cost accountant’s determination of current labor pay rates:

Worktype 1 0.19 hour @ $12.33 per hour

Worktype 2 0.33 hour @ $10.79 per hour

Worktype 3 0.63 hour @ $19.64 per hour

Required:

(a) Using the preceding data, calculate the direct labor cost for a Cambridge model pedestal. (Do not round your intermediate calculations.

(b) Would it be appropriate to use the cost calculated in part (a) as a standard cost for evaluating direct labor performance and valuing inventory?

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Osage Inc., has actual sales for June and July and forecast sales for August, September, October, and November as follows (A+)

Osage Inc., has actual sales for June and July and forecast sales for August, September, October, and November as follows:

Actual:

June 5,960 units

July 6,210 units

Forecasted:

August 6,030 units

September 6,710 units

October 5,630 units

November 5,280 units

Required:

(a) The firm’s policy is to have finished goods inventory on hand at the end of the month that is equal to 50% of the next month’s sales. It is currently estimated that there will be 3,900 units on hand at the end of July. Calculate the number of units to be produced in each of the months of August, September, and October.

(b) Each unit of finished product requires 5 pounds of raw materials. The firm’s policy is to have raw material inventory on hand at the end of each month that is equal to 55% of the next month’s estimated usage. It is currently estimated that 26,400 pounds of raw materials will be on hand at the end of July. Calculate the number of pounds of raw materials to be purchased in each of the months of August and September.(Round your answers to nearest whole number.)

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Olympia Productions, Inc., makes award medallions that are attached to ribbons (A+)

Olympia Productions, Inc., makes award medallions that are attached to ribbons. Each medallion requires 18 inches of ribbon. The sales forecast for February is 2,300 medallions. Estimated beginning inventories and desired ending inventories for February are:

Estimated Beginning Inventory Desired Ending Inventory

Medallions 1,000 720

Ribbon (yards) 70 26

Required:

(a) Calculate the number of medallions to be produced in February.

(b) Calculate the number of yards of ribbon to be purchased in February.

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Following are some transactions and events of Business Solutions (A+)

Following are some transactions and events of Business Solutions.

Feb. 26 The Company paid cash to Lyn Addie for eight days’ work at $135 per day.

Mar. 25 The Company sold merchandise with a $2,052 cost for $2,950 on credit to Wildcat Services, invoice dated March 25.

Required:

1. Assume that Lyn Addie is an unmarried employee. Her $1,080 of wages are subject to no deductions other than FICA Social Security taxes, FICA Medicare taxes, and federal income taxes. Her federal income taxes for this pay period total $108. Compute her net pay for the eight days’ work paid on February 26. FICA tax rates applicable are: 6.2% for Social security and 1.45% Medicare.

2. Record the journal entry to reflect the payroll payment to Lyn Addie as computed in part 1.

3. Record the journal entry to reflect the (employer) payroll tax expenses for the February 26 payroll payment. Assume Lyn Addie has not met earnings limits for FUTA and SUTA—the FUTA rate is 0.8% and the SUTA rate is 4% for Business Solutions.

4. Record the entry for the merchandise sold on March 25 if a 4% sales tax rate applies.

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Wrecker Computing sells merchandise for $5,000 cash on September 30 (cost of merchandise is $2,900) (A+)

Wrecker Computing sells merchandise for $5,000 cash on September 30 (cost of merchandise is $2,900). The sales tax law requires Wrecker to collect 4% sales tax on every dollar of merchandise sold. Record the entry for the $5,000 sale and its applicable sales tax. Also record the entry that shows the remittance of the 4% tax on this sale to the state government on October 15.

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2. Use the set of facts attached and addresses each of the following requirements (A+)

Use the set of facts attached and addresses each of the following requirements.

. Journalize the March transactions.

2. Post the entries to the ledger “T” accounts.

3. Prepare the trial balance as of March 31.

4. Journalize adjusting entries.

5. Post the entries to the ledger “T” accounts.

6. Prepare the adjusted trial balance as of March 31

7. Prepare the Income Statement

8. Prepare the Statement of Owners Equity

9. Prepare the Balance Sheet

10. Journalize the closing entries

11. Post the entries to the ledger “T” accounts.

12. Prepare the post-closing trial balance as of March 31.

Please use the following set of facts to address the requirements.

Laura Eddy opened Eddy\’s Carpet Cleaners on March 1. During March, the following transactions were completed.

Mar. 1 Invested $10,235 cash in the business.

1 Purchased used truck for $6,260, paying $3,130 cash and the balance on account.

3 Purchased cleaning supplies for $1,141 on account.

5 Paid $1,740 cash on one-year insurance policy effective March 1.

14 Billed customers $4,980 for cleaning services.

18 Paid $1,308 cash on amount owed on truck and $553 on amount owed on cleaning supplies.

20 Paid $1,785 cash for employee salaries.

21 Collected $1,394 cash from customers billed on March 14.

28 Billed customers $2,325 for cleaning services.

31 Paid gas and oil for month on truck $209.

31 Withdrew $610 cash for personal use.

The chart of accounts for Eddy\’s Carpet Cleaners contains the following accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 128 Cleaning Supplies, No. 130 Prepaid Insurance, No. 157 Equipment, No. 158 Accumulated Depreciation-Equipment, No. 201 Accounts Payable, No. 212 Salaries Payable, No. 301 L. Eddy, Capital, No. 306, L. Eddy, Drawing, No. 350 Income Summary, No. 400 Service Revenue, No. 633 Gas & Oil Expense, No. 634 Cleaning Supplies Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 726 Salaries Expense

On March 30, the following adjustments are needed.

1. Earned but unbilled revenue at March 31 was $703.

2. Depreciation on equipment for the month was $263.

3. One-twelfth of the insurance expired.

4. An inventory count shows $394 of cleaning supplies on hand at March 31.

5. Accrued but unpaid employee salaries were $515.

Requirements:

Prepare a separate sheet for each of the 12 requirements below. Show all work.

1. Journalize the March transactions.

2. Post the entries to the ledger “T” accounts.

3. Prepare the trial balance as of March 31.

4. Journalize adjusting entries.

5. Post the entries to the ledger “T” accounts.

6. Prepare the adjusted trial balance as of March 31

7. Prepare the Income Statement

8. Prepare the Statement of Owners Equity

9. Prepare the Balance Sheet

10. Journalize the closing entries

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