ACC 560 Week 5 Assignment
P8-4A Wordsmith is a publishing company with a number of different book lines. Each line has contracts with a number of different authors. The company also owns a printing operation called Pronto Press. The book lines and the printing operation each operate as a separate profit center. The printing operation earns revenue by printing books by authors under contract with the book lines owned by Wordsmith, as well as authors under contract with other companies. The printing operation bills out at $0.01 per page, and a typical book requires 500 pages of print. A manager from Business Books, one of the Wordsmith's book lines, has approached the manager of the printing operation offering to pay $0.007 per page for 1,200 copies of a 500-page book. The book line pays outside printers $0.009 per page. The printing operation's variable cost per page is $0.006.
Instructions:
Determine whether the printing should be done internally or externally, and the appropriate transfer price, under each of the following situations.
(a) Assume that the printing operation is booked solid for the next two years, and it would have to cancel an obligation with an outside customer in order to meet the needs of the internal division.
(b) Assume that the printing operation has available capacity.
(c) The top management of Franco believes that the printing operation should always do the printing for the company’s magazines. On a number of occasions it has forced the printing operation to cancel jobs with outside customers in order.
(d) Calculate the change in contribution margin to each division, and to the company as a whole, if top management forces the printing operation to accept the $0.007 per page transfer price when it has no available capacity.
Click here for the solution: Wordsmith is a publishing company with a number of different book lines (ACC 560 Week 5)
Showing posts with label book. Show all posts
Showing posts with label book. Show all posts
Sunday, October 4, 2015
Sunday, September 13, 2015
The financial statements of P&G are presented in Appendix 5B or can be accessed at the book’s companion website
The financial statements of P&G are presented in Appendix 5B or can be accessed at the book’s companion website, www.wiley.com/college/kieso.
Refer to these financial statements and the accompanying notes to answer the following questions.
(a) What is the par or stated value of P&G’s preferred stock?
(b) What is the par or stated value of P&G’s common stock?
(c) What percentage of P&G’s authorized common stock was issued at June 30, 2007?
(d) How many shares of common stock were outstanding at June 30, 2007, and June 30, 2006?
(e) What was the dollar amount effect of the cash dividends on P&G’s stockholders’ equity?
(f) What is P&G’s rate of return on common stock equity for 2007 and 2006?
(g) What is P&G’s payout ratio for 2007 and 2006?
(h) What was the market price range (high/low) of P&G’s common stock during the quarter ended June 30, 2007?
Click here for the solution: The financial statements of P&G are presented in Appendix 5B or can be accessed at the book’s companion website
Refer to these financial statements and the accompanying notes to answer the following questions.
(a) What is the par or stated value of P&G’s preferred stock?
(b) What is the par or stated value of P&G’s common stock?
(c) What percentage of P&G’s authorized common stock was issued at June 30, 2007?
(d) How many shares of common stock were outstanding at June 30, 2007, and June 30, 2006?
(e) What was the dollar amount effect of the cash dividends on P&G’s stockholders’ equity?
(f) What is P&G’s rate of return on common stock equity for 2007 and 2006?
(g) What is P&G’s payout ratio for 2007 and 2006?
(h) What was the market price range (high/low) of P&G’s common stock during the quarter ended June 30, 2007?
Click here for the solution: The financial statements of P&G are presented in Appendix 5B or can be accessed at the book’s companion website
Tuesday, September 8, 2015
The following information is available to reconcile Style Co.’s book balance of cash with its bank statement cash balance as of December 31, 2005
Problems 8-4B
The following information is available to reconcile Style Co.’s book balance of cash with its bank statement cash balance as of December 31, 2005:
a. After posting is complete, the December 31 cash balance according to the accounting records is $31,743.70, and the bank statement cash balance for that date is $45,091.80.
b. Check No. 1273 for $1,084.20 and Check No. 1282 for $390.00, both written and entered in the accounting records in December, are not among the canceled checks. Two checks, No. 1231 for $2,289.00 and No. 1242 for $370.50, were outstanding on the most recent November 30 reconciliation. Check No. 1231 is listed with the December canceled checks, but Check No. 1242 is not.
c. When the December checks are compared with entries in the accounting records, it is found that Check No. 1267 had been correctly drawn for $2,435 to pay for office supplies but was erroneously entered in the accounting records as $2,453.
d. Two debit memoranda are enclosed with the statement and are unrecorded at the time of the reconciliation. One debit memorandum is for $749.50 and dealt with an NSF check for $732 received from a customer, Titus Industries, in payment of its account. The bank assessed a $17.50 fee for processing it. The second debit memorandum is a $79.00 charge for check printing. Style did not record these transactions before receiving the statement.
e. A credit memorandum indicates that the bank collected $20,000 cash on a note receivable for the company, deducted a $20 collection fee, and credited the balance to the company’s Cash account. Style did not record this transaction before receiving the statement.
f. Style’s December 31 daily cash receipts of $7,666.10 were placed in the bank’s night depository on that date, but do not appear on the December 31 bank statement.
Required
1. Prepare the bank reconciliation for this company as of December 31, 2005.
2. Prepare the journal entries necessary to bring the company’s book balance of cash into conformity with the reconciled cash balance as of December 31, 2005.
Analysis Component
3. Explain the nature of the communications conveyed by a bank when the bank sends the depositor (a) a debit memorandum and (b) a credit memorandum.
Check (1) Reconciled balance, $50,913.20; (2) Cr. Note Receivable $20,000
Click here for the solution: The following information is available to reconcile Style Co.’s book balance of cash with its bank statement cash balance as of December 31, 2005
The following information is available to reconcile Style Co.’s book balance of cash with its bank statement cash balance as of December 31, 2005:
a. After posting is complete, the December 31 cash balance according to the accounting records is $31,743.70, and the bank statement cash balance for that date is $45,091.80.
b. Check No. 1273 for $1,084.20 and Check No. 1282 for $390.00, both written and entered in the accounting records in December, are not among the canceled checks. Two checks, No. 1231 for $2,289.00 and No. 1242 for $370.50, were outstanding on the most recent November 30 reconciliation. Check No. 1231 is listed with the December canceled checks, but Check No. 1242 is not.
c. When the December checks are compared with entries in the accounting records, it is found that Check No. 1267 had been correctly drawn for $2,435 to pay for office supplies but was erroneously entered in the accounting records as $2,453.
d. Two debit memoranda are enclosed with the statement and are unrecorded at the time of the reconciliation. One debit memorandum is for $749.50 and dealt with an NSF check for $732 received from a customer, Titus Industries, in payment of its account. The bank assessed a $17.50 fee for processing it. The second debit memorandum is a $79.00 charge for check printing. Style did not record these transactions before receiving the statement.
e. A credit memorandum indicates that the bank collected $20,000 cash on a note receivable for the company, deducted a $20 collection fee, and credited the balance to the company’s Cash account. Style did not record this transaction before receiving the statement.
f. Style’s December 31 daily cash receipts of $7,666.10 were placed in the bank’s night depository on that date, but do not appear on the December 31 bank statement.
Required
1. Prepare the bank reconciliation for this company as of December 31, 2005.
2. Prepare the journal entries necessary to bring the company’s book balance of cash into conformity with the reconciled cash balance as of December 31, 2005.
Analysis Component
3. Explain the nature of the communications conveyed by a bank when the bank sends the depositor (a) a debit memorandum and (b) a credit memorandum.
Check (1) Reconciled balance, $50,913.20; (2) Cr. Note Receivable $20,000
Click here for the solution: The following information is available to reconcile Style Co.’s book balance of cash with its bank statement cash balance as of December 31, 2005
Monday, August 17, 2015
Permtemp Corporation formed in 2008 and, for that year, reported the following book income statement and balance sheet
C:3-65 Permtemp Corporation formed in 2008 and, for that year, reported the following book income statement and balance sheet, excluding the federal income tax expense, deferred tax assets, and deferred tax liabilities:
AND SO ON
Required for 2008:
a. Prepare page 1 of the 2008 Form 1120, computing the corporations NOL.
b. Determine the corporations deferred tax asset and deferred tax liability situation, and then complete the income statement and balance sheet to reflect proper GAAP accounting under ASC 740. Use the balance sheet information to prepare Schedule L of the 2008 Form 1120.
c. Prepare the 2008 Schedule M-3 for Form 1120.
d. Prepare a schedule that reconciles the corporations effective tax rate to the statutory 34% tax rate.
Check Figures for Project:
2008 - Form 1120, line 30 taxable income has a net operating loss of ($887,500). Schedule L has lines 15 and 28 of $16,920,750. Schedule M-2 has a line 8 balance at the end of the year of negative ($393,250). The problem does not tell you to do the M-2 but I want you try it. M-3 line 4a should be $negative ($393,250), Part II, line 26 negative ($14,950,000), line 30 negative ($852,500) and Part III, line 30 $2,047,500 in column (d).
2009 - Form 1120, line 30 taxable income of $1,836,760. Remember that you had a net operating loss in 2008 and you should have special deductions. Line 31 total tax should be $624,498. Schedule L should have a rollover beginning balance from the 2008 ending balance above and the 2009 ending balance should be $20,578,000. Schedule M-2 should have a line 8 number of $2,568,502. Schedule M-3 should have a line 4a of $2,961,752, Part II, line 26 of negative ($21,945,000), line 30 of $2,762,760, and Part III, line 36 of $3,617,240 in column (d).
Click here for the solution: Permtemp Corporation formed in 2008 and, for that year, reported the following book income statement and balance sheet
AND SO ON
Required for 2008:
a. Prepare page 1 of the 2008 Form 1120, computing the corporations NOL.
b. Determine the corporations deferred tax asset and deferred tax liability situation, and then complete the income statement and balance sheet to reflect proper GAAP accounting under ASC 740. Use the balance sheet information to prepare Schedule L of the 2008 Form 1120.
c. Prepare the 2008 Schedule M-3 for Form 1120.
d. Prepare a schedule that reconciles the corporations effective tax rate to the statutory 34% tax rate.
Check Figures for Project:
2008 - Form 1120, line 30 taxable income has a net operating loss of ($887,500). Schedule L has lines 15 and 28 of $16,920,750. Schedule M-2 has a line 8 balance at the end of the year of negative ($393,250). The problem does not tell you to do the M-2 but I want you try it. M-3 line 4a should be $negative ($393,250), Part II, line 26 negative ($14,950,000), line 30 negative ($852,500) and Part III, line 30 $2,047,500 in column (d).
2009 - Form 1120, line 30 taxable income of $1,836,760. Remember that you had a net operating loss in 2008 and you should have special deductions. Line 31 total tax should be $624,498. Schedule L should have a rollover beginning balance from the 2008 ending balance above and the 2009 ending balance should be $20,578,000. Schedule M-2 should have a line 8 number of $2,568,502. Schedule M-3 should have a line 4a of $2,961,752, Part II, line 26 of negative ($21,945,000), line 30 of $2,762,760, and Part III, line 36 of $3,617,240 in column (d).
Click here for the solution: Permtemp Corporation formed in 2008 and, for that year, reported the following book income statement and balance sheet
Thursday, August 13, 2015
Francis Equipment Co. closes its books regularly on December 31, but at the end of 2010 it held its cash book open
P7-1 (Determine Proper Cash Balance) Francis Equipment Co. closes its books regularly on December 31, but at the end of 2010 it held its cash book open so that a more favorable balance sheet could be prepared for credit purposes. Cash receipts and disbursements for the first 10 days of January were recorded as December transactions. The information is given on the next page.
1. January cash receipts recorded in the December cash book totaled $45,640, of which $28,000 represents cash sales, and $17,640 represents collections on account for which cash discounts of $360 were given.
2. January cash disbursements recorded in the December check register liquidated accounts payable of $22,450 on which discounts of $250 were taken.
3. The ledger has not been closed for 2010.
4. The amount shown as inventory was determined by physical count on December 31, 2010.
The company uses the periodic method of inventory.
Instructions
(a) Prepare any entries you consider necessary to correct Francis's accounts at December 31.
(b) To what extent was Francis Equipment Co. able to show a more favorable balance sheet at December 31 by holding its cash book open? (Compute working capital and the current ratio.) Assume that the balance sheet that was prepared by the company showed the following amounts:
Dr. Cr.
Cash $39,000
Receivables 42,000
Inventories 67,000
Accounts payable $45,000
Other current liabilities 14,200
Click here for the solution: Francis Equipment Co. closes its books regularly on December 31, but at the end of 2010 it held its cash book open
1. January cash receipts recorded in the December cash book totaled $45,640, of which $28,000 represents cash sales, and $17,640 represents collections on account for which cash discounts of $360 were given.
2. January cash disbursements recorded in the December check register liquidated accounts payable of $22,450 on which discounts of $250 were taken.
3. The ledger has not been closed for 2010.
4. The amount shown as inventory was determined by physical count on December 31, 2010.
The company uses the periodic method of inventory.
Instructions
(a) Prepare any entries you consider necessary to correct Francis's accounts at December 31.
(b) To what extent was Francis Equipment Co. able to show a more favorable balance sheet at December 31 by holding its cash book open? (Compute working capital and the current ratio.) Assume that the balance sheet that was prepared by the company showed the following amounts:
Dr. Cr.
Cash $39,000
Receivables 42,000
Inventories 67,000
Accounts payable $45,000
Other current liabilities 14,200
Click here for the solution: Francis Equipment Co. closes its books regularly on December 31, but at the end of 2010 it held its cash book open
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