Pletcher Company's manufacturing overhead budget for the first quarter of 2008 contained the following data

ACC 560 Week 6 Assignment

E10-7 Pletcher Company's manufacturing overhead budget for the first quarter of 2008 contained the following data.

Variable Costs Fixed Costs
Indirect materials $12,000 Supervisory salaries $36,000
Indirect labor 10,000 Depreciation 7,000
Utilities 8,000 Property taxes and insurance 8,000
Maintenance 6,000 Maintenance 5,000

Actual variable costs were: indirect materials $13,800, indirect labor $9,600, utilities $8,700, and maintenance $4,900. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $8,200. The actual activity level equaled the budgeted level.

All costs are considered controllable by the production department manager except for depreciation, and property taxes and insurance.

Instructions
(a) Prepare a flexible manufacturing overhead budget report for the first quarter.
(b) Prepare a responsibility report for the first quarter.

Click here for the solution: Pletcher Company's manufacturing overhead budget for the first quarter of 2008 contained the following data

Differentiate between the operating and financial budgets that are contained in a master budget

8-5 Differentiate between the operating and financial budgets that are contained in a master budget. Why are both types needed?


Click here for the solution: Differentiate between the operating and financial budgets that are contained in a master budget

At December 31, 2008, the trial balance of Worcester Company contained the following amounts before adjustment

P9-5A At December 31, 2008, the trial balance of Worcester Company contained the following amounts before adjustment.

Debits Credits
Accounts Receivable $385,000
Allowance for Doubtful Accounts $ 2,000
Sales 950,000

Instructions
(a) Based on the information given, which method of accounting for bad debts is Worcester Company using—the direct write-off method or the allowance method? How can you tell?
(b) Prepare the adjusting entry at December 31, 2008, for bad debts expense under each of the following independent assumptions.
(1) An aging schedule indicates that $11,750 of accounts receivable will be uncollectible.
(2) The company estimates that 1% of sales will be uncollectible.
(c) Repeat part (b) assuming that instead of a credit balance there is an $2,000 debit balance in Allowance for Doubtful Accounts.
(d) During the next month, January 2009, a $3,000 account receivable is written off as uncollectible. Prepare the journal entry to record the write-off.
(e) Repeat part (d) assuming that Worcester uses the direct write-off method instead of the allowance method in accounting for uncollectible accounts receivable.
(f) What type of account is Allowance for Doubtful Accounts? How does it affect how accounts receivable is reported on the balance sheet at the end of the accounting period?

Click here for the solution: At December 31, 2008, the trial balance of Worcester Company contained the following amounts before adjustment

Retzlaff Company’s income statement contained the condensed information below

P12-5A Retzlaff Company’s income statement contained the condensed information below.

RETZLAFF COMPANY
Income Statement
For the Year Ended December 31, 2012

Revenues $970,000
Operating expenses, excluding depreciation $614,000
Depreciation expense 55,000
Loss on sale of equipment 16,000 685,000
Income before income taxes 285,000
Income tax expense 56,000
Net income $229,000

Retzlaff’s balance sheet contained the comparative data at December 31.

2012 2011
Accounts receivable $70,000 $60,000
Accounts payable 41,000 32,000
Income taxes payable 13,000 7,000
Accounts payable pertain to operating expenses.

Instructions
Prepare the operating activities section of the statement of cash flows using the indirect method.

Check: Cash from operations $305,000

Click here for the solution: Retzlaff Company’s income statement contained the condensed information below

Balance sheet accounts for Joyner Company contained the following amounts at the end of Years 1 and 2

Problem 15–9 Prepare a Statement of Cash Flows (Indirect Method); Free Cash Flow

Balance sheet accounts for Joyner Company contained the following amounts at the end of Years 1 and 2:

Debit Balance Accounts Year 2 Year 1
Cash $4,000 $21,000
A/R $250,000 $170,000
Inventory $310,000 $260,000
Prepaid Exp $7,000 $14,000
Loan to Hymas Company $40,000 $-
Plant & Equp $510,000 $400,000
Total Debits $1,121,000 $865,000

Credit Balance Accounts
Accum Depreciation $132,000 $120,000
A/P $310,000 $250,000
Accrued Liabilities $20,000 $30,000
Bonds Payable $190,000 $70,000
Deferred Income Taxes $45,000 $42,000
Common Stock $300,000 $270,000
Retained Earnings $124,000 $83,000
Total Credits $1,121,000 $865,000

The company’s income statement for Year 2 follows:

Sales . . . . . . . . . . . . . . . . . . . $900,000
Cost of goods sold . . . . . . . . . 500,000
Gross margin . . . . . . . . . . . . . 400,000
Selling and administrative
expenses . . . . . . . . . . . . . . 328,000
Net operating income . . . . . . . 72,000
Gain on sale of equipment . . . 8,000
Income before taxes . . . . . . . . 80,000
Income taxes . . . . . . . . . . . . . 24,000
Net income . . . . . . . . . . . . . . . $ 56,000


Equipment that had cost $40,000 and on which there was accumulated depreciation of $30,000 was sold during Year 2 for $18,000. Cash dividends totaling $15,000 were declared and paid during Year 2.

Required:
1. Using the indirect method, compute the net cash provided by operating activities for Year 2.
2. Prepare a statement of cash flows for Year 2.
3. Compute the free cash f ow for Year 2.
4. Briefly explain why cash declined so sharply during the year.

Click here for the solution: Balance sheet accounts for Joyner Company contained the following amounts at the end of Years 1 and 2