Ch 6. Questions for Review and Discussion
6. How should governments report their capital projects and debt service activities in their government-wide statements?
Click here for the solution: How should governments report their capital projects and debt service activities in their government-wide statements?
Showing posts with label Service. Show all posts
Showing posts with label Service. Show all posts
Monday, April 18, 2016
William County opted to account for its duplication service center in an internal service fund
Government and Not-for-Profit Accounting
E. 9-3 Internal service funds are accounted for similarly to businesses
William County opted to account for its duplication service center in an internal service fund. Previously the center had been accounted for in the county’s general fund. During the first month in which it was accounted for as an internal service fund the center engaged in the following transactions:
1. Five copiers were transferred to the internal service fund from the government’s general capital assets. At the time of transfer the copiers had a book value (net of accumulated depreciation) of $70,000.
2. The general fund made an initial cash contribution of $35,000 to the internal service fund.
3. The center borrowed $270,000 from a local bank to finance the purchase of additional equipment and renovation of its facilities. It issued a three-year note.
4. It purchased equipment for $160,000 and paid contractors $100,000 for improvements to its facilities.
5. It billed the county clerk’s office $5,000 for printing services, of which the office remitted $2,500.
6. It incurred, and paid in cash, various operating expenses of $9,000.
7. The fund recognized depreciation of $1,500 on its equipment and $900 on the improvements to its facilities.
a. Prepare journal entries in the internal service fund to record the transactions.
b. Comment on the main differences resulting from the shift from the general fund to an internal service fund in how the center's assets and liabilities would be accounted for and reported
Click here for the solution: William County opted to account for its duplication service center in an internal service fund
E. 9-3 Internal service funds are accounted for similarly to businesses
William County opted to account for its duplication service center in an internal service fund. Previously the center had been accounted for in the county’s general fund. During the first month in which it was accounted for as an internal service fund the center engaged in the following transactions:
1. Five copiers were transferred to the internal service fund from the government’s general capital assets. At the time of transfer the copiers had a book value (net of accumulated depreciation) of $70,000.
2. The general fund made an initial cash contribution of $35,000 to the internal service fund.
3. The center borrowed $270,000 from a local bank to finance the purchase of additional equipment and renovation of its facilities. It issued a three-year note.
4. It purchased equipment for $160,000 and paid contractors $100,000 for improvements to its facilities.
5. It billed the county clerk’s office $5,000 for printing services, of which the office remitted $2,500.
6. It incurred, and paid in cash, various operating expenses of $9,000.
7. The fund recognized depreciation of $1,500 on its equipment and $900 on the improvements to its facilities.
a. Prepare journal entries in the internal service fund to record the transactions.
b. Comment on the main differences resulting from the shift from the general fund to an internal service fund in how the center's assets and liabilities would be accounted for and reported
Click here for the solution: William County opted to account for its duplication service center in an internal service fund
Monday, October 26, 2015
Mark Miller started a delivery service, Miller Deliveries, on June 1, 2008
ACC 557 Week 1 Assignment
P1-4A Mark Miller started a delivery service, Miller Deliveries, on June 1, 2008. The following transactions occurred during the month of June.
June 1 Stockholders invested $10,000 cash in the business.
2 Purchased a used van for deliveries for $12,000. Mark paid $2,000 cash and signed a note payable for the remaining balance.
3 Paid $500 for office rent for the month.
5 Performed $4,400 of services on account.
9 Paid $200 in cash dividends.
12 Purchased supplies for $150 on account.
15 Received a cash payment of $1,250 for services provided on June 5.
17 Purchased gasoline for $100 on account.
20 Received a cash payment of $1,500 for services provided.
23 Made a cash payment of $500 on the note payable.
26 Paid $250 for utilities.
29 Paid for the gasoline purchased on account on June 17.
30 Paid $1,000 for employee salaries.
Instructions
(a) Show the effects of the previous transactions on the accounting equation using the following format.
Stockholders’
Assets Liabilities Equity
Accounts Delivery Notes Accounts Common Retained
Date Cash _ Receivable _ Supplies _ Van _ Payable _ Payable _ Stock _ Earnings
Include explanations for any changes in the Retained Earnings account in your analysis.
(b) Prepare an income statement for the month of June.
(c) Prepare a balance sheet at June 30, 2008.
Click here for the solution: Mark Miller started a delivery service, Miller Deliveries, on June 1, 2008
P1-4A Mark Miller started a delivery service, Miller Deliveries, on June 1, 2008. The following transactions occurred during the month of June.
June 1 Stockholders invested $10,000 cash in the business.
2 Purchased a used van for deliveries for $12,000. Mark paid $2,000 cash and signed a note payable for the remaining balance.
3 Paid $500 for office rent for the month.
5 Performed $4,400 of services on account.
9 Paid $200 in cash dividends.
12 Purchased supplies for $150 on account.
15 Received a cash payment of $1,250 for services provided on June 5.
17 Purchased gasoline for $100 on account.
20 Received a cash payment of $1,500 for services provided.
23 Made a cash payment of $500 on the note payable.
26 Paid $250 for utilities.
29 Paid for the gasoline purchased on account on June 17.
30 Paid $1,000 for employee salaries.
Instructions
(a) Show the effects of the previous transactions on the accounting equation using the following format.
Stockholders’
Assets Liabilities Equity
Accounts Delivery Notes Accounts Common Retained
Date Cash _ Receivable _ Supplies _ Van _ Payable _ Payable _ Stock _ Earnings
Include explanations for any changes in the Retained Earnings account in your analysis.
(b) Prepare an income statement for the month of June.
(c) Prepare a balance sheet at June 30, 2008.
Click here for the solution: Mark Miller started a delivery service, Miller Deliveries, on June 1, 2008
Mark Miller started a delivery service, Miller Deliveries, on June 1, 2008 (ACC 557 Week 1)
ACC 557 Week 1 Assignment
P1-4A Mark Miller started a delivery service, Miller Deliveries, on June 1, 2008.The following transactions occurred during the month of June.
June 1 Stockholders invested $10,000 cash in the business.
2 Purchased a used van for deliveries for $12,000. Mark paid $2,000 cash and signed a note payable for the remaining balance.
3 Paid $500 for office rent for the month.
5 Performed $4,400 of services on account.
9 Paid $200 in cash dividends.
12 Purchased supplies for $150 on account.
15 Received a cash payment of $1,250 for services provided on June 5.
17 Purchased gasoline for $100 on account.
20 Received a cash payment of $1,500 for services provided.
23 Made a cash payment of $500 on the note payable.
26 Paid $250 for utilities.
29 Paid for the gasoline purchased on account on June 17.
30 Paid $1,000 for employee salaries.
Instructions
(a) Show the effects of the previous transactions on the accounting equation using the following format.
Stockholders’
Assets Liabilities Equity
Accounts Delivery Notes Accounts Common Retained
Date Cash _ Receivable _ Supplies _ Van _ Payable _ Payable _ Stock _ Earnings
Include explanations for any changes in the Retained Earnings account in your analysis.
(b) Prepare an income statement for the month of June.
(c) Prepare a balance sheet at June 30, 2008.
Click here for the solution: Mark Miller started a delivery service, Miller Deliveries, on June 1, 2008 (ACC 557 Week 1)
P1-4A Mark Miller started a delivery service, Miller Deliveries, on June 1, 2008.The following transactions occurred during the month of June.
June 1 Stockholders invested $10,000 cash in the business.
2 Purchased a used van for deliveries for $12,000. Mark paid $2,000 cash and signed a note payable for the remaining balance.
3 Paid $500 for office rent for the month.
5 Performed $4,400 of services on account.
9 Paid $200 in cash dividends.
12 Purchased supplies for $150 on account.
15 Received a cash payment of $1,250 for services provided on June 5.
17 Purchased gasoline for $100 on account.
20 Received a cash payment of $1,500 for services provided.
23 Made a cash payment of $500 on the note payable.
26 Paid $250 for utilities.
29 Paid for the gasoline purchased on account on June 17.
30 Paid $1,000 for employee salaries.
Instructions
(a) Show the effects of the previous transactions on the accounting equation using the following format.
Stockholders’
Assets Liabilities Equity
Accounts Delivery Notes Accounts Common Retained
Date Cash _ Receivable _ Supplies _ Van _ Payable _ Payable _ Stock _ Earnings
Include explanations for any changes in the Retained Earnings account in your analysis.
(b) Prepare an income statement for the month of June.
(c) Prepare a balance sheet at June 30, 2008.
Click here for the solution: Mark Miller started a delivery service, Miller Deliveries, on June 1, 2008 (ACC 557 Week 1)
Wednesday, October 14, 2015
Airport Connection provides shuttle service between four hotels near a medical center and an international airport
ACC 560 Week 4 Assignment
E5-11 Airport Connection provides shuttle service between four hotels near a medical center and an international airport. Airport Connection uses two 10 passenger vans to offer 12 round trips per day. A recent month's activity in the form of a cost-volume-profit income statement is shown below.
Fare revenues (1,440 fares) $36,000
Variable costs
Fuel $5,040
Tolls and Parking 3,100
Maintenance 500 8,640
Contribution margin 27,360
Fixed costs
Salaries 13,000
Depreciation 1,300
Insurance 1,128 15,428
Net income $11,932
Instructions
(a) Identify the above costs as variable, fixed, or mixed.
(b) Calculate the expected costs when production is 5,000 units.
Click here for the solution: Airport Connection provides shuttle service between four hotels near a medical center and an international airport
E5-11 Airport Connection provides shuttle service between four hotels near a medical center and an international airport. Airport Connection uses two 10 passenger vans to offer 12 round trips per day. A recent month's activity in the form of a cost-volume-profit income statement is shown below.
Fare revenues (1,440 fares) $36,000
Variable costs
Fuel $5,040
Tolls and Parking 3,100
Maintenance 500 8,640
Contribution margin 27,360
Fixed costs
Salaries 13,000
Depreciation 1,300
Insurance 1,128 15,428
Net income $11,932
Instructions
(a) Identify the above costs as variable, fixed, or mixed.
(b) Calculate the expected costs when production is 5,000 units.
Click here for the solution: Airport Connection provides shuttle service between four hotels near a medical center and an international airport
Jack Shellenkamp owns and manages a computer repair service, which had the following trial balance on December 31, 2007 (the end of its fiscal year)
P2-3A Jack Shellenkamp owns and manages a computer repair service, which had the following trial balance on December 31, 2007 (the end of its fiscal year).
BYTE REPAIR SERVICE, INC.
Trial Balance
December 31, 2007
Cash $8,000
Accounts Receivable 15,000
Parts Inventory 13,000
Prepaid Rent 3,000
Shop Equipment 21,000
Accounts Payable $19,000
Common Stock 30,000
Retained Earnings 11,000
$60,000 $60,000
Summarized transactions for January 2008 were as follows:
1. Advertising costs, paid in cash, $1,000.
2. Additional repair parts inventory acquired on account $4,000.
3. Miscellaneous expenses, paid in cash, $2,000.
4. Cash collected from customers in payment of accounts receivable $14,000.
5. Cash paid to creditors for accounts payable due $15,000.
6. Repair parts used during January $4,000. (Hint: Debit this to Repair Parts Expense.)
7. Repair services performed during January: for cash $6,000; on account $9,000.
8. Wages for January, paid in cash, $3,000.
9. Dividends paid in January were $3,000.
Instructions
(a) Prepare journal entries to record each of the January transactions.
(b) Open T accounts for each of the accounts listed in the trial balance, and enter the opening balances for 2008. Post the journal entries to the accounts in the ledger.
(c) Prepare a trial balance as of January 31, 2008.
Click here for the solution: Jack Shellenkamp owns and manages a computer repair service, which had the following trial balance on December 31, 2007
BYTE REPAIR SERVICE, INC.
Trial Balance
December 31, 2007
Cash $8,000
Accounts Receivable 15,000
Parts Inventory 13,000
Prepaid Rent 3,000
Shop Equipment 21,000
Accounts Payable $19,000
Common Stock 30,000
Retained Earnings 11,000
$60,000 $60,000
Summarized transactions for January 2008 were as follows:
1. Advertising costs, paid in cash, $1,000.
2. Additional repair parts inventory acquired on account $4,000.
3. Miscellaneous expenses, paid in cash, $2,000.
4. Cash collected from customers in payment of accounts receivable $14,000.
5. Cash paid to creditors for accounts payable due $15,000.
6. Repair parts used during January $4,000. (Hint: Debit this to Repair Parts Expense.)
7. Repair services performed during January: for cash $6,000; on account $9,000.
8. Wages for January, paid in cash, $3,000.
9. Dividends paid in January were $3,000.
Instructions
(a) Prepare journal entries to record each of the January transactions.
(b) Open T accounts for each of the accounts listed in the trial balance, and enter the opening balances for 2008. Post the journal entries to the accounts in the ledger.
(c) Prepare a trial balance as of January 31, 2008.
Click here for the solution: Jack Shellenkamp owns and manages a computer repair service, which had the following trial balance on December 31, 2007
Friday, September 25, 2015
(ACC 560 Week 6) Roche and Young, CPAs, are preparing their service revenue (sales) budget for the coming year (2008)
ACC 560 Week 6 Assignment
E9-3 Roche and Young, CPAs, are preparing their service revenue (sales) budget for the coming year (2008). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below.
Department Quarter 1 Quarter 2 Quarter 3 Quarter 4
Auditing 2,200 1,600 2,000 2,400
Tax 3,000 2,400 2,000 2,500
Consulting 1,500 1,500 1,500 1,500
Average hourly billing rates are: auditing $80, tax $90, and consulting $100.
Instructions
Prepare the service revenue (sales) budget for 2008 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue.
Click here for the solution: (ACC 560 Week 6) Roche and Young, CPAs, are preparing their service revenue (sales) budget for the coming year (2008)
E9-3 Roche and Young, CPAs, are preparing their service revenue (sales) budget for the coming year (2008). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below.
Department Quarter 1 Quarter 2 Quarter 3 Quarter 4
Auditing 2,200 1,600 2,000 2,400
Tax 3,000 2,400 2,000 2,500
Consulting 1,500 1,500 1,500 1,500
Average hourly billing rates are: auditing $80, tax $90, and consulting $100.
Instructions
Prepare the service revenue (sales) budget for 2008 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue.
Click here for the solution: (ACC 560 Week 6) Roche and Young, CPAs, are preparing their service revenue (sales) budget for the coming year (2008)
Sunday, September 13, 2015
Gorky-Park Corporation provides postretirement health care benefits to employees who provide at least 12 years of service and reach age 62 while in service
Gorky-Park Corporation provides postretirement health care benefits to employees who provide at least 12 years of service and reach age 62 while in service. On January 1, 2011, following plan-related data were available
Accumulated postretirement benefit obligation 130
Fair value of plan assets none
Average remaining service period to retirement 25 years (same in previous 10 yrs)
Average remaining service period to full eligibility 20 years (same in previous 10 yrs)
On January 1, 2011, Gorky-Park amends the plan to provide certain dental benefits in addition to previously provided medical benefits. The actuary determines that the cost of making the amendment retroactive increases service cost for 2011 is $34 million. The interest rate is 8%.
Requirements
1. Calculate the postretirement benefit expense for 2011.
2. Prepare the journal entry to record the expense.
Click here for the solution: Gorky-Park Corporation provides postretirement health care benefits to employees who provide at least 12 years of service and reach age 62 while in service
Accumulated postretirement benefit obligation 130
Fair value of plan assets none
Average remaining service period to retirement 25 years (same in previous 10 yrs)
Average remaining service period to full eligibility 20 years (same in previous 10 yrs)
On January 1, 2011, Gorky-Park amends the plan to provide certain dental benefits in addition to previously provided medical benefits. The actuary determines that the cost of making the amendment retroactive increases service cost for 2011 is $34 million. The interest rate is 8%.
Requirements
1. Calculate the postretirement benefit expense for 2011.
2. Prepare the journal entry to record the expense.
Click here for the solution: Gorky-Park Corporation provides postretirement health care benefits to employees who provide at least 12 years of service and reach age 62 while in service
Sunday, September 6, 2015
If two service departments service the same number of departments, which service department's costs are allocated first when using the step method
1. If two service departments service the same number of departments, which service department's costs are allocated first when using the step method?
2. Which of the following service department cost allocation methods is most widely used by manufacturing companies?
3. Which of the following statements is (are) false regarding the effective use of management control systems.
(A) In general, cost allocations should not be used in management control systems because clear control over the cost being allocated cannot be determined.
(B) The primary reason to use a dual rate allocation system is to focus a manager's performance evaluation on factors under the manager's direct control.
4. The amount of resources used in an activity-based costing (ABC) system for a specific activity is computed by multiplying the:
5. Which of the following statements is false?
6. In general, the first budget prepared is the
7. Relative performance evaluations (RPE) are not designed to
8. Which of the following items would be classified as a batch-level cost in an activity-based cost management (ABM) system?
9. Which of the following activities is most likely to be classified as value-added for a manufacturing company?
10. The unused resource capacity is the difference between the resources supplied and the resources
Click here for the solution: If two service departments service the same number of departments, which service department's costs are allocated first when using the step method
2. Which of the following service department cost allocation methods is most widely used by manufacturing companies?
3. Which of the following statements is (are) false regarding the effective use of management control systems.
(A) In general, cost allocations should not be used in management control systems because clear control over the cost being allocated cannot be determined.
(B) The primary reason to use a dual rate allocation system is to focus a manager's performance evaluation on factors under the manager's direct control.
4. The amount of resources used in an activity-based costing (ABC) system for a specific activity is computed by multiplying the:
5. Which of the following statements is false?
6. In general, the first budget prepared is the
7. Relative performance evaluations (RPE) are not designed to
8. Which of the following items would be classified as a batch-level cost in an activity-based cost management (ABM) system?
9. Which of the following activities is most likely to be classified as value-added for a manufacturing company?
10. The unused resource capacity is the difference between the resources supplied and the resources
Click here for the solution: If two service departments service the same number of departments, which service department's costs are allocated first when using the step method
Monday, August 31, 2015
Mike purchases a heavy-duty truck (5-year class recovery property) for his delivery service on April 30, 2010
Mike purchases a heavy-duty truck (5-year class recovery property) for his delivery service on April 30, 2010. The truck is not considered a passenger automobile for purposes of the listed property and luxury automobile limitations. The truck has a depreciable basis of $39,080 and an estimated useful life of 5 years. Its estimated salvage value is $1,080. Assume no election to expense is made and no bonus depreciation is taken.
a. Calculate the amount of depreciation for 2010 using financial accounting straight-line depreciation (not the straight-line MACRS election) over the truck's estimated useful life.
b. Calculate the amount of depreciation for 2010 using the straight-line depreciation election under MACRS over the minimum number of years.
c. Calculate the amount of accelerated depreciation for 2010 that Mike could deduct using MACRS.
Click here for the solution: Mike purchases a heavy-duty truck (5-year class recovery property) for his delivery service on April 30, 2010
a. Calculate the amount of depreciation for 2010 using financial accounting straight-line depreciation (not the straight-line MACRS election) over the truck's estimated useful life.
b. Calculate the amount of depreciation for 2010 using the straight-line depreciation election under MACRS over the minimum number of years.
c. Calculate the amount of accelerated depreciation for 2010 that Mike could deduct using MACRS.
Click here for the solution: Mike purchases a heavy-duty truck (5-year class recovery property) for his delivery service on April 30, 2010
Saturday, August 15, 2015
Princess Cruise Lines has the following service departments; concierge, valet, and maintenance
Princess Cruise Lines has the following service departments; concierge, valet, and maintenance. Expense for these departments are allocated to Mediterranean and Trans-Atlantic cruises. Expenses for the departments are totaled (both variable and fixed components are combined) and as follows:
Concierge $2,500,000
Valet $1,750,000
Maintenance $4,250,000
The sea miles logged are 6,000,000 for the Mediterranean and 18,000,000 for the Trans-
Atlantic voyages.
Based upon the sea miles logged, allocate the service department costs.
Click here for the solution: Princess Cruise Lines has the following service departments; concierge, valet, and maintenance
Concierge $2,500,000
Valet $1,750,000
Maintenance $4,250,000
The sea miles logged are 6,000,000 for the Mediterranean and 18,000,000 for the Trans-
Atlantic voyages.
Based upon the sea miles logged, allocate the service department costs.
Click here for the solution: Princess Cruise Lines has the following service departments; concierge, valet, and maintenance
Thurman Munster, the owner of Adams Family RVs, is considering the addition of a service center his lot
Thurman Munster, the owner of Adams Family RVs, is considering the addition of a service center his lot. The building and equipment are estimated to cost $1,100,000 and both the building and equipment will be depreciated over 10 years using the straight-line method. The building and equipment have zero estimated residual value at the end of 10 years. Munster’s required rate of return for this project is 12 percent. Net income related to each year of the investment is as follows:
Revenue $450,000
Less:
Material cost $ 60,000
Labor 100,000
Depreciation 110,000
Other 10,000 280,000
Income before taxes 170,000
Taxes at 40% 68,000
Net income $102,000
(a) Determine the net present value of the investment in the service center. Should Munster invest in the service center?
(b) Calculate the internal rate of return of the investment to the nearest ½ percent.
(c) Calculate the payback period of the investment.
(d) Calculate the accounting rate of return.
Click here for the solution: Thurman Munster, the owner of Adams Family RVs, is considering the addition of a service center his lot
Revenue $450,000
Less:
Material cost $ 60,000
Labor 100,000
Depreciation 110,000
Other 10,000 280,000
Income before taxes 170,000
Taxes at 40% 68,000
Net income $102,000
(a) Determine the net present value of the investment in the service center. Should Munster invest in the service center?
(b) Calculate the internal rate of return of the investment to the nearest ½ percent.
(c) Calculate the payback period of the investment.
(d) Calculate the accounting rate of return.
Click here for the solution: Thurman Munster, the owner of Adams Family RVs, is considering the addition of a service center his lot
Friday, July 31, 2015
Tel-Com Company, a telephone service and supply company, has just completed its fourth year of operations
Problem 9-3A Compare Two Methods of Accounting for Uncollectible Receivables
Tel-Com Company, a telephone service and supply company, has just completed its fourth year of operations. The direct write-off method of recording bad debt expense has been used during the entire period. Because of substantial increases in sales volume and the amount of uncollectible accounts, the company is considering changing to the allowance method. Information is requested as to the effect that an annual provision of ¾% of sales would have had on the amount of bad debt expense reported for each of the past four years. It is also considered desirable to know what the balance of Allowance for Doubtful Accounts would have been at the end of each year. The following data have been obtained from the accounts:
Year Sales Written Off 1st 2nd 3rd 4th
1st $700,000 $2,000 $2,000
2nd $900,000 $3,400 $1,800 $1,600
3rd $1,200,000 $6,450 $1,000 $3,700 $1,750
4th $2,000,000 $9,200 - $1,260 $3,700 $4,240
Instructions
1. Assemble the desired data, using the following column headings:
2. Experience during the first four years of operations indicated that the receivables were either collected within two years or had to be written off as uncollectible. Does the estimate of 3/4% of sales appear to be reasonably close to the actual experience with uncollectible accounts originating during the first two years? Explain.
Check: 1. Year 4: Balance of Allowance Account, End of Year, $14,950
Click here for the solution: Tel-Com Company, a telephone service and supply company, has just completed its fourth year of operations
Tel-Com Company, a telephone service and supply company, has just completed its fourth year of operations. The direct write-off method of recording bad debt expense has been used during the entire period. Because of substantial increases in sales volume and the amount of uncollectible accounts, the company is considering changing to the allowance method. Information is requested as to the effect that an annual provision of ¾% of sales would have had on the amount of bad debt expense reported for each of the past four years. It is also considered desirable to know what the balance of Allowance for Doubtful Accounts would have been at the end of each year. The following data have been obtained from the accounts:
Year Sales Written Off 1st 2nd 3rd 4th
1st $700,000 $2,000 $2,000
2nd $900,000 $3,400 $1,800 $1,600
3rd $1,200,000 $6,450 $1,000 $3,700 $1,750
4th $2,000,000 $9,200 - $1,260 $3,700 $4,240
Instructions
1. Assemble the desired data, using the following column headings:
2. Experience during the first four years of operations indicated that the receivables were either collected within two years or had to be written off as uncollectible. Does the estimate of 3/4% of sales appear to be reasonably close to the actual experience with uncollectible accounts originating during the first two years? Explain.
Check: 1. Year 4: Balance of Allowance Account, End of Year, $14,950
Click here for the solution: Tel-Com Company, a telephone service and supply company, has just completed its fourth year of operations
Sunday, July 19, 2015
Pacific Airlines has three service departments; ticketing, baggage handling, and aircraft maintenance
Pacific Airlines has three service departments; ticketing, baggage handling, and aircraft maintenance. Costs of these departments are allocated to two revenue producing departments, domestic and international flights. Costs for the service departments are not separated into fixed and variable and the totals are as follows:
Ticketing $4,000,000
Baggage handling $2,000,000
Aircraft maintenance $6,000,000
Air miles are as follows: Domestic 5,000,000
International 20,000,000
(a) Allocate the service department costs based on air miles.
(b) Evaluate World Airlines use of air miles as a basis for allocation. Do you think the cause-and-effect relationship is strong?
(c) Suggest alternative methods to allocate the service department costs.
Click here for the solution: Pacific Airlines has three service departments; ticketing, baggage handling, and aircraft maintenance
Ticketing $4,000,000
Baggage handling $2,000,000
Aircraft maintenance $6,000,000
Air miles are as follows: Domestic 5,000,000
International 20,000,000
(a) Allocate the service department costs based on air miles.
(b) Evaluate World Airlines use of air miles as a basis for allocation. Do you think the cause-and-effect relationship is strong?
(c) Suggest alternative methods to allocate the service department costs.
Click here for the solution: Pacific Airlines has three service departments; ticketing, baggage handling, and aircraft maintenance
Wednesday, July 15, 2015
QwikRepairs has over 200 auto-maintenance service outlets nationwide
E6-7 QwikRepairs has over 200 auto-maintenance service outlets nationwide. It provides primarily two lines of service: oil changes and brake repairs: Oil change related services represent 70% of its sales and provide a contribution margin ratio of 20%. Brake repair represents 30% of its sales and provides a 60% contribution margin ratio. The company’s fixed costs are $16,000 (that is, $80,000 per service outlet).
Instructions
a) Calculate the dollar amount of each type of service that the company must provide in order to break even.
b) The company has a desired net income of $60,000 per service outlet. What is the dollar amount of each type of service that must be provided by each service outlet to meet its target net income per outlet?
Click here for the solution: QwikRepairs has over 200 auto-maintenance service outlets nationwide
Instructions
a) Calculate the dollar amount of each type of service that the company must provide in order to break even.
b) The company has a desired net income of $60,000 per service outlet. What is the dollar amount of each type of service that must be provided by each service outlet to meet its target net income per outlet?
Click here for the solution: QwikRepairs has over 200 auto-maintenance service outlets nationwide
Sunday, July 12, 2015
A government's interest expenditure as reported in its debt service fund differs significantly from its interest expense as reported in its government-wide statements
A government's interest expenditure as reported in its debt service fund differs significantly from its interest expense as reported in its government-wide statements. What is the most likely explanation for the difference?
Click here for the solution: A government's interest expenditure as reported in its debt service fund differs significantly from its interest expense as reported in its government-wide statements
Click here for the solution: A government's interest expenditure as reported in its debt service fund differs significantly from its interest expense as reported in its government-wide statements
Saturday, July 11, 2015
TV commercials, newspaper and magazine ads, the tools that carry and deliver the “image” of a marketed product or service, are known as its
1. TV commercials, newspaper and magazine ads, the tools that carry and deliver the “image” of a marketed product or service, are known as its:
2. Given a unique product or service and a small, focused target market, a strategy designed to set a product or service apart from competitors is known as:
3. According to economic theory, unlimited access to information which leads to perfect market knowledge of price structures will tend to cause prices to:
4. For an online marketing effort involving a product (after the selection of a good product name) the URL for your Web site should be:
5. During market segmentation, the investigation of prospect clusters according to lifestyle and self-concept is referred to as:
6. When using electronic tools, logistics (distribution) functions should be:
7. The objective and task method in which the marketer delineates the marketing for the period and then calculates a cost for each task is also known as:
8. One effective method for online marketers to increase consumer credibility in a Web site or product line is to:
9. Good online marketers will be particularly aware of how customers will use their products and the specific advantages and positive outcomes obtained from the use of the products by doing a:
10. Since online media fit best into the direct marketing category, business on the WWW may have the effect of:
11. The implementation of marketing programs means:
12. "Coupon Keys" are:
13. Attracting new customers is about __________ times more costly than selling to and servicing existing customers.
14. Marketers learn about customers' concerns by:
15. SOQ is:
16. Marketing managers should be briefed on a program’s progress:
17. In planning for a 12-month period:
18. Marketing planning:
19. The one invisible marketing "P" that marketers are bringing into the light is:
20. Measurement parameters for judging a salesperson’s performance include:
Click here for the solution: TV commercials, newspaper and magazine ads, the tools that carry and deliver the “image” of a marketed product or service, are known as its
2. Given a unique product or service and a small, focused target market, a strategy designed to set a product or service apart from competitors is known as:
3. According to economic theory, unlimited access to information which leads to perfect market knowledge of price structures will tend to cause prices to:
4. For an online marketing effort involving a product (after the selection of a good product name) the URL for your Web site should be:
5. During market segmentation, the investigation of prospect clusters according to lifestyle and self-concept is referred to as:
6. When using electronic tools, logistics (distribution) functions should be:
7. The objective and task method in which the marketer delineates the marketing for the period and then calculates a cost for each task is also known as:
8. One effective method for online marketers to increase consumer credibility in a Web site or product line is to:
9. Good online marketers will be particularly aware of how customers will use their products and the specific advantages and positive outcomes obtained from the use of the products by doing a:
10. Since online media fit best into the direct marketing category, business on the WWW may have the effect of:
11. The implementation of marketing programs means:
12. "Coupon Keys" are:
13. Attracting new customers is about __________ times more costly than selling to and servicing existing customers.
14. Marketers learn about customers' concerns by:
15. SOQ is:
16. Marketing managers should be briefed on a program’s progress:
17. In planning for a 12-month period:
18. Marketing planning:
19. The one invisible marketing "P" that marketers are bringing into the light is:
20. Measurement parameters for judging a salesperson’s performance include:
Click here for the solution: TV commercials, newspaper and magazine ads, the tools that carry and deliver the “image” of a marketed product or service, are known as its
Saturday, May 9, 2015
(Problem 10-20 Service Versus Manufacturing Companies) Mazzel Company began operations on January 1, 2008, by issuing common stock for $33,000 cash
Problem 10-20 Service Versus Manufacturing Companies
Mazzel Company began operations on January 1, 2008, by issuing common stock for $33,000 cash. During 2008, Mazzel received $39,000 cash from revenue and incurred costs that required $66,000 of cash payments.
Required
Prepare an income statement, balance sheet, and statement of cash flows for Mazzel for 2008, under each of the following independent scenarios.
a. Mazzel is a promoter of rock concerts. The $66,000 was paid to provide a rock concert that produced the revenue.
b. Mazzel is in the car rental business. The $66,000 was paid to purchase automobiles. The automobiles were purchased on January 1, 2008, had four-year useful lives and no expected salvage value. Mazzel uses straight-line depreciation. The revenue was generated by leasing the automobiles.
c. Mazzel is a manufacturing company. The $66,000 was paid to purchase the following items.
AND SO ON
Check:
a. Net loss: $27,000
b. Total assets: $55,500
c. Net income: $11,225
Click here for the solution: Mazzel Company began operations on January 1, 2008, by issuing common stock for $33,000 cash
Mazzel Company began operations on January 1, 2008, by issuing common stock for $33,000 cash. During 2008, Mazzel received $39,000 cash from revenue and incurred costs that required $66,000 of cash payments.
Required
Prepare an income statement, balance sheet, and statement of cash flows for Mazzel for 2008, under each of the following independent scenarios.
a. Mazzel is a promoter of rock concerts. The $66,000 was paid to provide a rock concert that produced the revenue.
b. Mazzel is in the car rental business. The $66,000 was paid to purchase automobiles. The automobiles were purchased on January 1, 2008, had four-year useful lives and no expected salvage value. Mazzel uses straight-line depreciation. The revenue was generated by leasing the automobiles.
c. Mazzel is a manufacturing company. The $66,000 was paid to purchase the following items.
AND SO ON
Check:
a. Net loss: $27,000
b. Total assets: $55,500
c. Net income: $11,225
Click here for the solution: Mazzel Company began operations on January 1, 2008, by issuing common stock for $33,000 cash
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